X X University of New York Tirana - X Meeting - Zoom International Corporate Finance + -php/2021/04/29/icf-311/#gf_476 Exercise 3 (15 Points) The following information is available: You have $1,000,000 to invest The current spot rate of the Moroccan dirham is $.110. The 60-day forward rate of the Moroccan dirham is $.108. The 60-day interest rate in the U.S. is 1 percent The 60-day interest rate in Morocco is 2 percent What is the yield (1.e. profit in percentage terms) to a U.S. investor who conducts covered interest arbitrage? Did covered interest arbitrage work for the investor in this case? I Exercise 4 (20 Points) McDonnell Douglas just signed a contract to sell a DC 10 aircraft to Air France. Air France will be billed FF50 million which is payable in one year. The current spot exchange rate is $0.20/FF and the one-year forward rate is $0.19/FF. The annual interest rate is 6.0% in the U.S. and 9.5% in France. McDonnell Douglas is concerned with the volatile exchange rate between the dollar and the franc and would like to hedge exchange exposure. ATLAS aaaaa FA FS F7 FE F9 F10 for 9 R N T C X X University of New York Tirana - X Meeting - Zoom International Corporate Finance + -php/2021/04/29/icf-311/#gf_476 Exercise 3 (15 Points) The following information is available: You have $1,000,000 to invest The current spot rate of the Moroccan dirham is $.110. The 60-day forward rate of the Moroccan dirham is $.108. The 60-day interest rate in the U.S. is 1 percent The 60-day interest rate in Morocco is 2 percent What is the yield (1.e. profit in percentage terms) to a U.S. investor who conducts covered interest arbitrage? Did covered interest arbitrage work for the investor in this case? I Exercise 4 (20 Points) McDonnell Douglas just signed a contract to sell a DC 10 aircraft to Air France. Air France will be billed FF50 million which is payable in one year. The current spot exchange rate is $0.20/FF and the one-year forward rate is $0.19/FF. The annual interest rate is 6.0% in the U.S. and 9.5% in France. McDonnell Douglas is concerned with the volatile exchange rate between the dollar and the franc and would like to hedge exchange exposure. ATLAS aaaaa FA FS F7 FE F9 F10 for 9 R N T C