ASAP You have $10,000 to invest for 90 days. Current spot rate: $1.32/£. The 90-day forward rate is $38/£.90-day interest rate in US is 5% and 90-day interest rate in UK is 2.5%. What is the no-arbitrage 90-day forward rate?

Forward rate = [Spot rate * (1 + domestic interest rate) ]/ (1 + foreign interest rate).

You have S10,000 to invest for 90 days. Current spot rate: S1.32/£. The 90-day forward rate is S38/£. 90-day interest rate in US is 5% and 90-day interest rate in UK is 2.5%. What is the no-arbitrage 90- day forward rate?

You have S10,000 to invest for 90 days. Current spot rate: S1.32/£. The 90-day forward rate is S38/£. 90-day interest rate in US is 5% and 90-day interest rate in UK is 2.5%. What is the no-arbitrage 90- day forward rate?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter27: Multinational Financial Management

Section: Chapter Questions

Problem 2P: The nominal yield on 6-month T-bills is 7%, while default-free Japanese bonds that mature in 6...

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Question

ASAP

You have $10,000 to invest for 90 days. Current spot rate: $1.32/£. The 90-day forward rate is $38/£.
90-day interest rate in US is 5% and 90-day interest rate in UK is 2.5%. What is the no-arbitrage 90-
day forward rate?

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