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
Related questions
Question
Suppose you observe the following exchange rates and interest rates for the USD and THB:
|
Bid |
Ask |
|
|
USD/THB |
30.01 |
30.31 |
|
USD/THB F,360 |
? |
? |
|
Trader lends at |
Trader borrows at |
|
|
I USD |
1.55% |
1.75% |
|
I THB |
0.60% |
0.85% |
Which answer is closest to the minimum forward ask (USD/THBAF,360) that prevents covered interest rate arbitrage?
25.29
29.67
30.13
30.97
29.97
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