Spot rate of C$ $0.90
90-day forward C$ $0.91
90-day Canadian rate 4%
90-day US rate 3.5%
Assuming Jared wants to get a loan for $10,000,000 in one country and invest in the other, how much money could he potentially make?
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Spot rate of C$ $0.90 90-day forward C$ $0.91 90-day Canadian rate 4% 90-day US rate...
Assume the following information: Spot rate of Canadian dollar : $.80 90-day forward rate of Canadian dollar : $.79 90-day Canadian interest rate : 4% 90-day U.S. interest rate : 2.5% a) What would be the return to a U.S. investor who used covered interest arbitrage from investing in Canada? (assume the investor invests $1,000,000). Does the return exceed the return from investing in the U.S. over the 90-day period? Is it worthwhile for the U.S. investor to invest in...
1. Assume the following information: Spot rate of Canadian dollar : $.80 90-day forward rate of Canadian dollar : $.79 90-day Canadian interest rate : 4% 90-day U.S. interest rate : 2.5% a) What would be the return to a U.S. investor who used covered interest arbitrage from investing in Canada? (assume the investor invests $1,000,000). Does the return exceed the return from investing in the U.S. over the 90-day period? Is it worthwhile for the U.S. investor to invest...
If the spot rate was $1.0410/C$ and the 90-day forward rate was $1.0510/C$, how much more (in U.S. dollars) would you receive by selling C$1,521,000 at the forward rate than at the spot rate?
(4)Consider the following information: .2.5% 90-day forward rate for the pound.. ..........$1.50 Spot rate for the pound.............................51.52 (a)Assume that CSI company based in the US will receive 1,000,000 pounds in 90 days, would it be better off using the forward hedge or money market hedge? Substantiate your answer with appropriate quantitative evidence. (b)Assume that the same CSI company will need 1000,000 pounds in 90 days and wishes to hedge its payables position. Would you recommend a forward hedge or a...
Canadian Dollar: Spot and Forward (C$/$) Euro: Spot and forward ($/€) Mid rates Bid Ask Mid rates Bid Ask spot 1.2645 1.2639 1.2651 1.2390 1.2387 1.2393 Forward 3-week 23 27 19 15 3-month 135 128 155 146 7a. How much $100 will cost you in Canadian Dollar and Euro? (Hint: you are buying USD). 7b. What are 3-week and 3-month forward bid and ask rate for Canadian Dollar and Euro? 7c. Based on information above, what are the profit margin...
Suppose the spot rate of Polish Zloty to the US dollar is 4.0 and the forward rate in the 180 day market of the Polish Zloty is 3.5 per dollar. The Polish Zloty is then selling at a _____________ to the spot rate. Express your answer as a decimal not a percentage.
Due 12/1/2019 DY Mum 1. Assume the following information Spot rate of Canadian dollar may in 90-day forward rate of Canadian dollar $0.80 So American aunts Duration1 A 5.79 90-day Canadian lending interest rate 4% 90-day Canadian borrowing interest rate 4.5% forward to bring 90-day U.S. lending interest rate 2.25% 90-day U.S. borrowing interest rate 2.5% -B back man a . Given this information, what is the appropriate covered interest arbitrage strategy? (Should you borrow in Canada and save in...
The following table shows the US$/C$ spot rate and forward rates as of January 11, 2019. (a) Covert the above exchange rates into the direct quotes. (b) Does the forward rate structure imply that the Canadian dollar will depreciate or appreciate against the US dollar over the next year? c)What is the implied annual rate of appreciation/depreciation of the Canadian dollar against the US dollar over the next three months, over the next six months, and over the next year?...
Suppose the spot exchange rate for the Canadian dollar is C$1.09 and the six-month forward rate is C$1.12. Assuming absolute PPP holds, what is the current cost in the United States of a hamburger if the price in Canada of an equivalent burgerin Canada is C$4.75? $5.39 $5.18 $4.36 $5.02 $4.51
If the spot exchange rate for the US/Canadian dollar rate was 1.0150 in 2011 and risk-free rate was 3.5% in Canada and 2.5% in US, what would be the expected exchange rate in 2013? A. -$0.9955 B. $0.9955 C. $1.0349 D. -$1.0349 E. none