5. You can borrow USD50,000.00. You found out the interest rate in Malaysia is 11% p.a. and in US is 12% p.a.. At present, the exchange rate of MYR/USD is 0.2455 and the three month forward is 0.2458. If the exchange rate in three months' time is 0.2457, how much would your interest arbitrage profit or loss be? (Show all the possible workings).
5. You can borrow USD50,000.00. You found out the interest rate in Malaysia is 11% p.a. and in US is 12% p.a.. At present, the exchange rate of MYR/USD is 0.2455 and the three month forward is 0.2458. If the exchange rate in three months' time is 0.2457, how much would your interest arbitrage profit or loss be? (Show all the possible workings).
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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