Assume the following information
You have $420,000 to invest
Current spot rate of Sudanese dinar (SDD) = $.00570
90-day forward rate of the dinar = $.00569
90-day interest rate in the U.S. = .04
90-day interest rate in Sudan = 0.044
If you conduct covered interest arbitrage, what amount will you have after 90 days?
Assume the following information You have $420,000 to invest Current spot rate of Sudanese dinar (SDD) ...
23. Assume the following information: You have $900,000 to invest: Current spot rate of Australian dollar (AS) 180-day forward rate of the Australian dollar 180-day interest rate in the U.S. 180-day interest rate in Australia $.62 -.64 3.5% 3.0% If you conduct covered interest arbitrage, what is the dollar profit you will have realized after 180 days?
Assume the following information: You have $900,000 to invest Current spot rate of Australian dollar (A$) is $0.62 180-day forward rate of the Australian dollar is $0.64 180-day interest rate in the U.S. is 3.5% 180-day interest rate in Australia is 3.0% What is the return obtainable after 180 days from covered interest arbitrage?
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...
You have $1000 to invest. Current spot rate of British pound is £1 = $1.45, 1-year forward rate of pound £1= $1.40, 1-year interest rate in U.S.= 2%, 1-year interest rate in Great Britain = 3%. (a) If you use covered interest arbitrage strategy for a 1-year investment, what will be the amount of U.S. dollars you will have after 1 year? (b) Based on your calculation, explain where do you want to invest?
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...
Assume the following information: Spot rate of Mexican peso : $.100 180-day forward rate of Mexican peso : $.098 180-day Mexican interest rate : 6% 180-day U.S. interest rate : 5% a) What would be the return to a Mexican investor who has 1,000,000 Mexican pesos from using covered interest arbitrage? (i.e. the Mexican investor will convert the peso into U.S. dollar at the spot rate and invest it in the U.S. for 180 days, and simultaneously sell a U.S....
2. Assume the following information: Spot rate of Mexican peso : $.100 180-day forward rate of Mexican peso : $.098 180-day Mexican interest rate : 6% 180-day U.S. interest rate : 5% a) What would be the return to a Mexican investor who has 1,000,000 Mexican pesos from using covered interest arbitrage? (i.e. the Mexican investor will convert the peso into U.S. dollar at the spot rate and invest it in the U.S. for 180 days, and simultaneously sell a...
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...
3. Assume the following information: Quoted Price Spot rate of Canadian dollar $0.81 90day forward rate of Canadian dollar $0.79 90day Canadian interest rate 4% (per 90 days) 90day U.S. interest rate 2.5% (per 90 days) a) Given this information, what would be the yield (percentage return) to a U.S. investor who used covered interest arbitrage? (Assume the investor invests $1,000,000.) b) The forward rate should rise, True or False?
Assume the following information: U.S. investors have $1,000,000 to invest: 12% 10% 1-year deposit rate offered on U.S. dollars 1-year deposit rate offered on Singapore dollars 1-year forward rate of Singapore dollars Spot rate of Singapore dollar $.412 $.400 Given this information: O interest rate parity exists and covered interest arbitrage by U.S. investors results in the same yield as investing domestically. O interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in a yield above...