1. There is $500,000 to invest. U.S is offering a 60-day interest rate of 6 percent per annum, while Malaysia is giving

[answerhappygod]

1. There is $500,000 to invest. U.S is
offering a 60-day interest rate of 6 percent per annum, while
Malaysia is giving 12 percent per annum for a tenure of 60 days.
The spot rate of Ringgit Malaysia (RM) is $0.110 and the forward
rate is $0.108. Ignoring all the tax effects, Would an American
investor or Malaysian investor benefit from this arbitrage?
2. Agnes is a speculator in investing in
options. Agnes had purchased a put option on Australian dollar with
a strike price of $0.80. the premium is $0.02. on the expiration
date, the Australian dollar spot rate is $0.74.
a. Should Agnes exercise the option on this
date or just let the option expire?
b. Calculate Agnes’s net profit per
unit?
c. Calculate the net profit per unit to
the seller of this put option