You observe the following quoted money market rates: Spot exchange rate 95-day Forward exchange rate 95-day USD interest rate 95-day AUD interest rate a. -USD 361,605.85 O b. -USD 352,934.10 O c. -USD 272,802.68 What will your profit (in USD) be 95 days from now if you borrow USD3 million today and invest in Australia and then convert back to USD? In your calculations assume 360 days per year. O d. -USD322,300.31 Bid AUD1.185/USD AUD1.341/USD 5.57% p.a. 7.71% p.a. e. Ask AUD1.189/USD AUD1.349/USD 6.38% p.a. 8.81% p.a. None of the options in this question.

You observe the following quoted money market rates: Spot exchange rate 95-day Forward exchange rate 95-day USD interest rate 95-day AUD interest rate a. -USD 361,605.85 O b. -USD 352,934.10 O c. -USD 272,802.68 What will your profit (in USD) be 95 days from now if you borrow USD3 million today and invest in Australia and then convert back to USD? In your calculations assume 360 days per year. O d. -USD322,300.31 Bid AUD1.185/USD AUD1.341/USD 5.57% p.a. 7.71% p.a. e. Ask AUD1.189/USD AUD1.349/USD 6.38% p.a. 8.81% p.a. None of the options in this question.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 49QA

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