The treasurer of a major U.S.firm has $8.2 million to invest for three months.The interest rate in the U.S.is .53 percent per month.The interest rate in the UK is .54 percent per month.The spot exchange rate is £.64, and the three-month forward rate is £.65.Ignore transaction costs.The treasurer should invest the funds in the ____ because he can earn an additional ____.
A) US; $131,072.23
B) US;$125,722.20
C) UK; $9,418.02
D) UK; $38,522.47
E) UK; $121,510.67
Correct Answer:
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