Question
You have the following financial market information. You also have 1.78 million Australian dollar (A$) or 3.33 million Thai baht (THB) to make a profit
You have the following financial market information. You also have 1.78 million Australian dollar (A$) or 3.33 million Thai baht (THB) to make a profit due to covered interest arbitrage (CIA). Calculate the profit in percentage if the CIA opportunity exists in the market. (enter the two decimal number without sign and symbol)
| Bid price | Ask price | |
| THB spot rate | A$0.0459 | A$0.0661 |
| THB one-year forward rate | A$0.0412 | A$0.0664 |
| A$ spot rate | THB22.1909 | THB24.3941 |
| A$ one-year forward rate | THB27.8140 | THB29.4233 |
| Deposit rate | Loan rate | |
| Interest rate on A$ | 2.11% | 4.73% |
| Interest rate on THB | 6.77% | 8.91% |
Answer:
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Artificial Intelligence For Audit, Forensic Accounting, And Valuation A Strategic Perspective
Authors: Al Naqvi
1st Edition
1119601886, 9781119601883
