You have the following financial market information. You also have 1.57 million Australian dollar (A$) 3.51 million Thai baht (THB) to make a profit due to covered interest arbitrage (CIA). Calculate the profit in A$ or THB if the CIA opportunity exists in the market 5 THB spot rate THB one-year forward rate A$ spot rate A$ one-year forward rate Interest rate on A$ Intoroot roto on THR THB Bid price A$ A$ THB 0.0431 0.0421 22.4115 27.1789 deposit rate 2.43% 6.26% Ask price 0.0607 0.0647 24.922 29.6532 Loan rate 4.19% 8 52% Bid rate (Sell) Ask rate (Buy) 187,641.00
You have the following financial market information. You also have 1.57 million Australian dollar (A$) 3.51 million Thai baht (THB) to make a profit due to covered interest arbitrage (CIA). Calculate the profit in A$ or THB if the CIA opportunity exists in the market 5 THB spot rate THB one-year forward rate A$ spot rate A$ one-year forward rate Interest rate on A$ Intoroot roto on THR THB Bid price A$ A$ THB 0.0431 0.0421 22.4115 27.1789 deposit rate 2.43% 6.26% Ask price 0.0607 0.0647 24.922 29.6532 Loan rate 4.19% 8 52% Bid rate (Sell) Ask rate (Buy) 187,641.00
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance
Section: Chapter Questions
Problem 13PAE
Related questions
Question
What is the calculation to get 187,641?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning