Compute the proceeds of both strategies

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Reference no: EM132052680

You want to invest $1,000,000,000 for one year. Assume the interest rate in the Australia is 6% and the interest rate in the United States is 1%. The current spot rate is AUD/$ 1.32 and the one-year forward rate is AUD/$ 1.3307.

Would you prefer investing in Australia or in the United States? Why? Compute the proceeds of both strategies.

Reference no: EM132052680

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