Determine the yield to an investor from argentina

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Question - Today, the one-year U.S. interest rate is 5 percent, while the one-year interest rate in Argentina is 19 percent. The spot rate of the Argentine peso (AP) is $0.47. The one-year forward rate of the AP exhibits a 16% discount. Determine the yield (percentage return on investment) to an investor from Argentina who engages in covered interest arbitrage. Do not round intermediate calculations.

Reference no: EM132747074

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