Business, 19.08.2019 21:30 wolfiewolffromsketch

Let's suppose you have $1 million to invest. you are considering to invest in uk first, then convert the british pound back to us$ in the future. you know following information: annual interest rate on investment in us: 2% annual interest rate on investment in uk: 4% investment period: 1 year current exchange rate: 1.48 $/bp forward exchange rate which you can apply when converting bp to us$: 1.45 $/bp what would be profit if you apply the covered-interest arbitrage?
profit, about $36,838
profit, about $28,424
profit, about $16,645
profit, about $26,315

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Let's suppose you have $1 million to invest. you are considering to invest in uk first, then convert...