# 2. Assume the following information: Spot rate of f = 51.60 180-day forward rate of f = S 1.56 180-day British interest rate = 4 % 180-day U.S. interest rate = 3\% Based on this information, is covered interest arbitrage by U.S. investors feasible (assuming that U.S. investors use their own funds)? Explain.

FindFind

### International Financial Management

14th Edition
Publisher: Cengage
ISBN: 9780357130698
FindFind

### International Financial Management

14th Edition
Publisher: Cengage
ISBN: 9780357130698

#### Solutions

Chapter 7, Problem 2ST
Textbook Problem

## 2. Assume the following information:Spot rate of f = 51.60 180-day forward rate of f = S 1.56 180-day British interest rate = 4 % 180-day U.S. interest rate = 3\%Based on this information, is covered interest arbitrage by U.S. investors feasible (assuming that U.S. investors use their own funds)? Explain.

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