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

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

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

Post by answerhappygod »

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?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”