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You can borrow $1 million in the U.S. at an annualized interest rate of 6%. You can use the proceeds to invest in Germany, which
You can borrow $1 million in the U.S. at an annualized interest rate of 6%. You can use the proceeds to invest in Germany, which is part of eurozone at an 8% annualized rate of return. Thee current spot rate is $1.31/EUR and the spot rate 6 months from now is excepted to be $1.36/EUR. If you choose to purchase the strategy over 6 months what should you gain/loss?
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