Question
The spot rate between the U.K. and the U.S. is .7614/$, while the one-year forward rate is .7540/$. The risk-free rate in the U.K. is
The spot rate between the U.K. and the U.S. is .7614/$, while the one-year forward rate is .7540/$. The risk-free rate in the U.K. is 4.59 percent and risk-free rate in the United States is 2.74 percent. How much in profit can you earn on $11,000 utilizing covered interest arbitrage?
a.$316.41
b.$276.86
c.$103.15
d.$253.13
e.$91.68
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Fundamentals Of Business Mathematics In Canada
Authors: F. Ernest Jerome, Jackie Shemko
3rd Edition
1259370151, 978-1259370151
