Explain the foreign currency and invest

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Currently, the GBP/USD rate is 1.5039 and the six-month forward exchange rate is 1.5238. The six-month interest rate is 6.1% per annum in the U.S. and 4.7% per annum in the U.K. Assume that you can borrow £1,000,000 or its equivalent in USD. How much do you make/lose if you borrow the foreign currency and invest locally? (USD, no cents)

Reference no: EM133061053

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