Find exchange rate data

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1. Find 3-month bond data from September 2021 for the U.S, Japan, and somewhere that uses the Euro. Make sure that all of the bonds have roughly the same maturity date. Assume that you can borrow at the rate on these bonds (this will somewhat overestimate your profits).

2. Find exchange rate data from, roughly, the same date as your bond data for the yen and euro against the US dollar. Also find the exchange rates as of the date of the maturity of those bonds. Since this is just an estimate you can be very approximate with the dates you are using.

3. Assume that you borrowed $10 million worth of each foreign currency to conduct a carry trade strategy. What would be your profit or loss, in dollars, assuming you held the trade until the bonds matured? Calculate this separately for each strategy.

4. Identify the sources of risk in this strategy.

Reference no: EM133123788

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