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International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick
Edition 2ISBN: 978-0132162760International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick
Edition 2ISBN: 978-0132162760 Exercise 23
As a trader for Goldman Sachs, you see the following prices from two different banks:
1-year euro deposits/loans: 6.0%-6.125% p.a.
1-year Malaysian ringgit deposits/ loans: 10.5%- 10.625% p.a.
Spot exchange rates: MYR4.6602/EUR-MYR4.6622/EUR
1-year forward exchange rates: MYR4.9500/EUR- MYR4.9650/EUR
The interest rates are quoted on a 360-day year. Can you do a covered interest arbitrage
1-year euro deposits/loans: 6.0%-6.125% p.a.
1-year Malaysian ringgit deposits/ loans: 10.5%- 10.625% p.a.
Spot exchange rates: MYR4.6602/EUR-MYR4.6622/EUR
1-year forward exchange rates: MYR4.9500/EUR- MYR4.9650/EUR
The interest rates are quoted on a 360-day year. Can you do a covered interest arbitrage
Explanation
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A trader has details about various curre...
International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick
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