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You live in the United States and want to try to make some money through interest rate arbitrage abroad. You notice the
Posted: Sun Jul 03, 2022 6:49 am
by answerhappygod
- You Live In The United States And Want To Try To Make Some Money Through Interest Rate Arbitrage Abroad You Notice The 1 (20.74 KiB) Viewed 11 times
You live in the United States and want to try to make some money through interest rate arbitrage abroad. You notice the following rates quoted online: Bid Ask Spot exchange rate USD 1.1228/EUR USD 1.1265/EUR 150-day Forward exchange rate USD 1.1599/EUR USD 1.1648/EUR 150-day USD interest rate 11.49% p.a. 11.97% p.a. 150-day EUR interest rate 8.49% p.a. 8.72% p.a. What will your profit (in USD) be 150 days from now if you borrow USD17 million and invest in France then convert back to the U.S dollar? O a. USD 275,369 O b. USD 446,119 O c. USD 326,144 O d. USD 267,440 O e. USD 316,753