Assume the following information: You have $1,000,000 to invest Current spot rate of pound = $1.30/bp 90 day forward rate for pound in the Forward market = $1.42/bp 3 month deposit rate in US = 6% annual 3 month deposit rate in UK = 4% annual If you use covered interest arbitrage for a 90 day investment, what will be the amount of US$ you will have after 90 da O around $1,103,230.78 O around $1,034,000.33 O around $1,198,879.34 O around $1,040,021.65

Assume the following information: You have $1,000,000 to invest Current spot rate of pound = $1.30/bp 90 day forward rate for pound in the Forward market = $1.42/bp 3 month deposit rate in US = 6% annual 3 month deposit rate in UK = 4% annual If you use covered interest arbitrage for a 90 day investment, what will be the amount of US$ you will have after 90 da O around $1,103,230.78 O around $1,034,000.33 O around $1,198,879.34 O around $1,040,021.65

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 2P

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