Assume the Following Information:​

question 20

Multiple Choice

Assume the following information:​
You have $1,000,000 to invest:
If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have aFter 90 days?
Current spot rate of pound=$1.60
90-day forward rate of pound=$1.57
3-month deposit rate in U.S.=3%
3-month deposit rate in U.K.=4%

• A)$1,020,500
• B)$1,045,600
• C)$1,073,330
• D)$1,094,230
• E)$1,116,250

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Definitions:

Diamond

A precious gemstone made of carbon, known for its exceptional hardness and high refractive index, leading to its notable sparkle.

Queen

A female monarch or the wife of a king, who rules a kingdom or has a high position of authority.

Probability

A measure of the likelihood that an event will occur.

Likely Viewer

An individual or demographic group considered probable to watch a particular show or type of content.