(b) Assume you can borrow $100,000.00, using covered interest arbitrage for a 30- day investment, calculate the arbitrage profit in the amount of U.S. dollars after 30 days. Current spot rate of Euro 30-day forward rate of Euro Borrowing rate in United States Deposit rate in Germany S1.15 $1.17 4.10% p.a. 4.15% p.a. II || ||||
(b) Assume you can borrow $100,000.00, using covered interest arbitrage for a 30- day investment, calculate the arbitrage profit in the amount of U.S. dollars after 30 days. Current spot rate of Euro 30-day forward rate of Euro Borrowing rate in United States Deposit rate in Germany S1.15 $1.17 4.10% p.a. 4.15% p.a. II || ||||
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter27: Multinational Financial Management
Section: Chapter Questions
Problem 7MC
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