You decide to try the carry trade. The one-year interest rate in the eurozone is 5 % and 8 % in the US. The spot rate is
Posted: Sun May 08, 2022 10:34 am
You decide to try the carry trade. The one-year interest rate in the eurozone is 5 % and 8 % in the US. The spot rate is €1.60 / $. You borrow €3 million for one year. If the spot rate in one year is €1.5378 / $, what are your profits / losses ?