it on simple interest to the European Union (EU). The prevailing interest rates gazetted from UK banks and Zimbabwean (ZW) banks are as follows: Deposit rate Lending rate UK 8% 10% ZW 20% 50% In addition, assume that the prevailing spot exchange rate is ZW/UK Pounds 130.00 – 145.00 And the number of days in a year is 360 days. Calculate the amount that would be receivable by Tuli Super Minerals if th
it on simple interest to the European Union (EU). The prevailing interest rates gazetted from UK banks and Zimbabwean (ZW) banks are as follows: Deposit rate Lending rate UK 8% 10% ZW 20% 50% In addition, assume that the prevailing spot exchange rate is ZW/UK Pounds 130.00 – 145.00 And the number of days in a year is 360 days. Calculate the amount that would be receivable by Tuli Super Minerals if th
Chapter7: International Arbitrage And Interest Rate Parity
Section: Chapter Questions
Problem 19QA
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- Tuli Super Minerals of Manicaland exports raw diamonds valued at one million pounds (£1,000,000) on 180 days credit on simple interest to the European Union (EU). The prevailing interest rates gazetted from UK banks and Zimbabwean (ZW) banks are as follows:
|
Deposit rate |
Lending rate |
UK |
8% |
10% |
ZW |
20% |
50% |
In addition, assume that the prevailing spot exchange rate is ZW/UK Pounds 130.00 – 145.00
And the number of days in a year is 360 days.
Calculate the amount that would be receivable by Tuli Super Minerals if the
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