Assume the Following Information

question 26

Multiple Choice

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

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