Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. assume the following information current spot r

Assume the following information Current spot rate of New Zealand dollar = $0.41 Forecasted spot rate of New Zealand...

90.2K

Verified Solution

Question

Finance

Assume the following information

Current spot rate of New Zealand dollar=$0.41
Forecasted spot rate of New Zealand dollar 1 year from now=$0.43
One-year forward rate of the New Zealand dollar=$0.44
Annual interest rate on New Zealand dollars=8%
Annual interest rate on U.S. dollars=9%

Given the information in this question, the return from coveredinterest arbitrage by U.S. investors with $675,000 to invest isabout _______in decimal.

Answer & Explanation Solved by verified expert
4.1 Ratings (622 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Assume the following informationCurrent spot rate of New Zealand dollar=$0.41Forecasted spot rate of New Zealand dollar 1 year from now=$0.43One-year forward rate of the New Zealand dollar=$0.44Annual interest rate on New Zealand dollars=8%Annual interest rate on U.S. dollars=9%Given the information in this question, the return from coveredinterest arbitrage by U.S. investors with $675,000 to invest isabout _______in decimal.

Other questions asked by students

Q

1. The systematic risk principle states that the expected return on a risky asset depends only on...

Finance
Q

The number of parking tickets issued in a certain city on any given weekday has a...

Statistics
Q

Consider the following reaction: A(g)?2B(g) Find the equilibrium partial pressures of A and B for each of...

Chemistry
Q

You put 2 gummy bears into the first solution Next your directions tells you that...

Biology
Q

3 A ball of mass 50 g is dropped from a heigh h 10 m...

Physics
Q

Half life for a radioactive sample is 20 min Find the time interval in between...

Physics
Q

Find the total cost function C x in thousands of dollars if the marginal cost...

Basic Math
Q

Water is leaking out of an inverted conical tank at a rate of 12300 cubic...

Calculus
Q

Divide If the divisor contains 2 or more terms use long division 5x 2 26x...

Algebra
Q

Fill in the blanks to correctly complete the sentence below The graph of y 2...

Algebra
Q

SanData Inc. recently paid its annual dividend of $1.15. Dividends have consistently grown at a...

Finance
Q

Identify some advantages to the nation that follow when one party controls the House, the...

Accounting