The writer is very fast, professional and responded to the review request fast also. Thank you.
Use the following information to answer the next two questions. Assume you have $10,000 to invest; the current spot rate of British pounds is $1.800/£; the 90-day forward rate of the pound is $1.730/£; the annual interest rate in the US is 6%; the annual interest rate in the UK is 6.5%. (For the answer to be acceptable you need to show the calculation.)
a. Where would you invest your $10,000 to maximize your return with no foreign exchange risk? (Show how many USD you will have for sure if you invest in the US versus if you invest in the UK.) (4 marks)
b. Given the US interest rate, the UK interest rate, and the spot rate, what would be an equilibrium forward exchange quotation? (The interest rates quoted are per annum, i.e., per 360 days, the forward is for 90 days.) (3 marks)
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more