The spot price for foreign currency in Australia is $0.6873/A$. The three month forward rate is $0.7117/A$. The three-mo
Posted: Sun Jul 03, 2022 12:54 pm
The spot price for foreign currency in Australia is $0.6873/A$.The three month forward rate is $0.7117/A$. The three-monthinterest rate for risk-free bonds is 8.5% p.a. in Australia and5.5% p.a. in the U.S. Using the above rates, can you engage in acovered interest rate arbitrage as an American investor. Use either$100,000 or A$100,000 as the notational amount. show workplease