How much do you make-lose

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Question - Currently, the GBP/USD rate is 1.5071 and the three-month forward exchange rate is 1.5269. The three-month interest rate is 7.3% 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?

Reference no: EM132991165

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