You need 50 million British pounds in 90 days and you are trying to decide between investing in Australia at 12% per year or in
You need 50 million British pounds in 90 days and you are trying to decide between investing in Australia at 12% per year or in the UK at 6% per year. Currently, the spot exchange rate is 2.05 GPB = 1 AUD and the 90-day forward exchange rate is 2.035 GBP = 1 AUD.
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Outline the steps and show the calculations for how you would invest in the UK without bearing any foreign exchange risk?
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Authors: George H. Pink, Paula H. Song
7th Edition
1640553177, 978-1640553170
