Percentage return from covered interest arbitrage

Assignment Help Financial Management

Reference no: EM131871592

Assume the following information: Current spot rate of Australian dollar = $.90 Forecasted spot rate of Australian dollar 1 year from now = $.88 1-year forward rate of Australian dollar = $.91 Annual interest rate for Australian dollar deposit = 3% Annual interest rate in the U.S. = 2% What is your percentage return from covered interest arbitrage with $500,000? SHOW WORK

Reference no: EM131871592

Questions Cloud

Par vale will affect which balance sheet accounts : The sale of a new common stock at a price greater than par vale will affect which balance sheet accounts? What stock price would you consider appropriate?

Determine which of porters generic strategies you will use : A competitive advantage is a product or service that an organization's customers place a greater value on than similar offerings from a competitor.

New equipment at the start of the project : Your company is considering a new project that will require 8000,000 of new equipment at the start of the project.

Develop a simple gantt chart to represent all of activities : Develop a simple Gantt Chart to represent all of activities associated with the party planning process. Assume you have 30 days to complete the entire process.

Percentage return from covered interest arbitrage : What is your percentage return from covered interest arbitrage with $500,000?

Identify which aspects of the article will be helpful : As you learned this week, understanding your competition and adjusting your own business accordingly is critical to a business's success.

Property testing algorithms for a specific property : Property testing algorithms for a specific property:

Analyze the business process that need improvement : A business process includes activities and tasks that cross functional or organizational boundaries.

What stock price would consider appropriate : What stock price would you consider appropriate? If the price sales benchmark ratio is 3.9. What is an appropriate stock price?

User Account

All Pages