You have the following financial market information. You also have 1.57 million Australian dollar (A$) 3.51 million Thai baht (THB) to make a profit due to covered interest arbitrage (CIA). Calculate the profit in A$ or THB if the CIA opportunity exists in the market 5 THB spot rate THB one-year forward rate A$ spot rate A$ one-year forward rate Interest rate on A$ Intoroot roto on THR THB Bid price A$ A$ THB 0.0431 0.0421 22.4115 27.1789 deposit rate 2.43% 6.26% Ask price 0.0607 0.0647 24.922 29.6532 Loan rate 4.19% 8 52% Bid rate (Sell) Ask rate (Buy) 187,641.00

You have the following financial market information. You also have 1.57 million Australian dollar (A$) 3.51 million Thai baht (THB) to make a profit due to covered interest arbitrage (CIA). Calculate the profit in A$ or THB if the CIA opportunity exists in the market 5 THB spot rate THB one-year forward rate A$ spot rate A$ one-year forward rate Interest rate on A$ Intoroot roto on THR THB Bid price A$ A$ THB 0.0431 0.0421 22.4115 27.1789 deposit rate 2.43% 6.26% Ask price 0.0607 0.0647 24.922 29.6532 Loan rate 4.19% 8 52% Bid rate (Sell) Ask rate (Buy) 187,641.00

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 13PAE

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