Assume the Following Information: You Have $400,000 to Invest

question 43

Multiple Choice

Assume the following information: You have $400,000 to invest:
Current spot rate of Sudanese dinar (SDD)
=
$) 00570
90-day forward rate of the Sudanese dinar
=
$) 00569
90-day interest rate in the United States
=
4) 0%
90-day interest rate in Sudan
=
4) 2%
​
If you conduct covered interest arbitrage, what amount will you have after 90 days?

• A) $421,213
• B) $419,887
• C) $424,242
• D) $416,068

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