Question
The spot rate between the U.K. and the U.S. is .7544/$, while the one-year forward rate is .7526/$. The risk-free rate in the U.K. is
The spot rate between the U.K. and the U.S. is .7544/$, while the one-year forward rate is .7526/$. The risk-free rate in the U.K. is 4.31 percent and risk-free rate in the United States is 2.60 percent. How much in profit can you earn on $6,500 utilizing covered interest arbitrage?
Multiple Choice
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$106.84
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$127.37
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$94.97
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$111.45
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$101.89
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Financial Freedom
Authors: Timothy Turner
1st Edition
1801573573, 978-1801573573
