ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Given: interest rates are 8% in the U.S. and 5% in the U.K. The spot exchange rate for British pounds is 123 $/£ and the 1-year forward rate is F1-yr = 125 $/£. You wish to borrow dollars. How can you effectively (synthetically) borrow $1,000,000 for one year without using the U.S.
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