Find out the amount of us dollars

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Reference no: EM133040817

Assume the following information:

You have $500,000 to invest:

Current spot rate of pound

=

$1.25

90-day forward rate of pound

=

$1.27

3-month deposit rate in U.S.

=

3%

3-month deposit rate in Great Britain

=

3.5%

If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days? 

Reference no: EM133040817

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