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You live in Australia and want to try to make some money through interest rate arbitrage abroad. You notice the followin
Posted: Sun Jul 03, 2022 6:49 am
by answerhappygod
- You Live In Australia And Want To Try To Make Some Money Through Interest Rate Arbitrage Abroad You Notice The Followin 1 (27.3 KiB) Viewed 12 times
You live in Australia 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 AUD 1.1547/CHF AUD 1.1590/CHF 120-day Forward exchange rate AUD 1.2025/CHF AUD 1.2082/CHF 120-day AUD interest rate 9.92% p.a. 10.37% p.a. 120-day CHF interest rate 7.37% p.a. 7.74% p.a. What will your profit (in AUD) be 120 days from now if you borrow AUD7 million and invest in Switzerland then convert back to the Australian dollar? O a. AUD 199,181 O b. AUD 269,348 O C. AUD 218,638 O d. AUD 191,976 O e. AUD 210,729