Question
The treasurer of a major U.S. firm has $25 million to invest for three months. The interest rate in the United States is .25 percent
The treasurer of a major U.S. firm has $25 million to invest for three months. The interest rate in the United States is .25 percent per month. The interest rate in Great Britain is .30 percent per month. The spot exchange rate is .625, and the three-month forward rate is .628. Ignore transaction costs. What would be the value of the investment in three months if the money is invested in the U.S. or Great Britain? (Enter your answers in dollars, not in millions of dollars. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 1,234,567.89.)
U.S. | $ Not attempted |
Great Britain | $ 15,765,625 15,765,625 Incorrect |
Previously posted and received wrong answers. Can someone please help me. TY |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started