Reference no: EM132907780

Clayton Moore is the manager of an international money market fund managed out of London. Unlike many money funds that guarantee their investors a near? risk-free investment with variable interest? earnings, Clayton? Moore's fund is a very aggressive fund that searches out relatively? high-interest earnings around the? globe, but at some risk. The fund is? pound-denominated. Clayton is currently evaluating a rather interesting opportunity in Malaysia. Since the Asian Crisis of? 1997, the Malaysian government enforced a number of currency and capital restrictions to protect and preserve the value of the Malaysian ringgit. The ringgit was fixed to the U.S. dollar at RM3.80?/$ for seven years. In? 2005, the Malaysian government allowed the currency to float against several major currencies. The current spot rate today is RM3.13485/$. Local currency time deposits of? 180-day maturities are earning 8.901?% per annum. The London eurocurrency market for pounds is yielding 4.203?% per annum on similar? 180-day maturities. The current spot rate on the British pound is $1.5823/£?, and the? 180-day forward rate is $1.5561/£. The initial investment is £1,000,000.00.

Problem 1: The investment proceeds from the initial investment is £_____.