Made with covered interest arbitrage

Assignment Help Financial Management

Reference no: EM132047861

Assume the following information:

1-year interest rate on U.S. dollars = 11.4%

1-year interest rate on Singapore dollars = 9.1%

Spot rate of Singapore dollar = 0.4 USD/SGD

1-year forward premium on Singapore dollars = 3.79%

Given this information, how much profit can be made with covered interest arbitrage, by borrowing 1 million USD?

Reference no: EM132047861

Questions Cloud

How large must the sample size be to guarantee this : She wants to be within .056 of the true proportion of defective parts with a 90% level of confidence. How large must the sample size be to guarantee this?

What is the probability that a player will score : What is the probability that a player will score above 552,000 and earn this coupon?

Think about the concepts of risk : Think about the concepts of risk which are part of this section of the course in the context of the size of a firm.

Should the airline change the number of tickets : Should the airline change the number of tickets they sell for this? flight? Explain.

Made with covered interest arbitrage : How much profit can be made with covered interest arbitrage, by borrowing 1 million USD?

Create the systems integration project proposal shell : Following is an outline for the comprehensive design proposal that will evolve throughout the course. This deliverable will be created in incremental steps.

Machine based on its internal rate of return : If management requires a minimum 15% rate of return, should they purchase this particular machine based on its internal rate of return?

What is the value of bond that matures in eight years : What is the value of a bond that matures in 8 years, has an annual coupon payment of $90, and has a par value of $1000?

Weight of ants follow a normal distribution : Does natural phenomena like hemoglobin levels or the weight of ants follow a normal distribution.

User Account

All Pages