You work on a FX trading desk. A client calls and asks you the
deposit rate...
90.2K
Verified Solution
Link Copied!
Question
Finance
You work on a FX trading desk. A client calls and asks you thedeposit rate you can guarantee them in the Malaysian Ringgit (MYR)currency for one year. You have the below information. What depositrate can you offer the client as a guarantee you can secure them?Your main funding currency is USD. Answer in percentage points tothe fourth decimal (e.g. 2.5000% is 2.5000).
USD/MYR Spot: 4.1090 USD/MYR
1-yr Forward FX: 4.1695 USD
1yr Interest Rate: 2.4400%
Answer & Explanation
Solved by verified expert
3.8 Ratings (678 Votes)
As per Interest rate Parity Forward price Spot price1interest rate in UShome1interest rate in Malaysiaaway here Spot 41090 USDMYR
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!
