Assume the Following Information

question 29

Multiple Choice

Assume the following information:
You have $900,000 to invest
Current spot rate of Australian dollar (A$) = $.62
180-day forward rate of the Australian dollar = $.64
180-day interest rate in the U.S.= 3.5%
180-day interest rate in Australia = 3.0%
If you conduct covered interest arbitrage,what is the dollar profit you will have realized after 180 days

• A) $56,903.
• B) $61,548.
• C) $27,000.
• D) $31,500.

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Definitions:

Ecosystem

A community of living organisms in conjunction with the nonliving components of their environment, interacting as a system.

Interacting Organisms

Living entities that engage in relationships with one another within an ecosystem, such as competition, predation, symbiosis, and parasitism.

Chemical Factors

Elements and compounds that influence reactions and processes in biological and environmental systems.

Ecosphere

A term often used synonymously with the biosphere, referring to all the ecosystems on Earth where living organisms interact with each other and their physical environment.