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You have 1,000,000 to invest Current spot rate of dollar = 0.54 90-day forward...

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Finance

You have 1,000,000 to invest

Current spot rate of dollar = 0.54

90-day forward rate of dollar = 0.53

1 year deposit rate in US = 4%

1 year deposit rate in UK = 3%

If you use covered interest arbitrage for a 1 year investment, what will be the amount of pounds you will have after 1 year?

1,020,740

1,045,600

1,073,330

1,094,230

Answer & Explanation Solved by verified expert
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