Suppose the annualized interest rate on 180-day Russian Ruble deposits is 4.3125 (bid) - 4.4375 (ask). At the same time, annualized interest rate on 180-day interest rate on 180-day Turkish Lira deposits is 9.125-9.375. Spot and 180-day forward quotes (TRY per RUB) are 0.07915-0.08820 (and 0.07450- 0.07950, respectively. Find forward rate such that there is NO arbitrage? BID ASK 180-day Russian Ruble bank rates 4.3125 44375 180-day Turkish Lira bank rates Spot (TRY/RUB) Forward (TRY/RUB) 9.125 9375 0.07915 0.08820 0.07450

Suppose the annualized interest rate on 180-day Russian Ruble deposits is 4.3125 (bid) - 4.4375 (ask). At the same time, annualized interest rate on 180-day interest rate on 180-day Turkish Lira deposits is 9.125-9.375. Spot and 180-day forward quotes (TRY per RUB) are 0.07915-0.08820 (and 0.07450- 0.07950, respectively. Find forward rate such that there is NO arbitrage? BID ASK 180-day Russian Ruble bank rates 4.3125 44375 180-day Turkish Lira bank rates Spot (TRY/RUB) Forward (TRY/RUB) 9.125 9375 0.07915 0.08820 0.07450

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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