Assume the Following Information:
You Have $400,000 to Invest If You Conduct Covered Interest Arbitrage, What Amount Will You

question 75

Multiple Choice

Assume the following information:
You have $400,000 to invest:
$$\begin{array}{l}\text { You have } \$ 400,000 \text { to invest: }\\\begin{array} { l l r } \text { Current spot rate of Sudanese dinar (SDD) } & = & \$ .00570 \\\text { 90-day forward rate of the dinar } & = & \$ .00569 \\\text { 90-day interest rate in the U.S. } & = & 4.0 \% \\\text { 90-day interest rate in Sudan } & = & 4.2 \%\end{array}\end{array}$$
If you conduct covered interest arbitrage, what amount will you have after 90 days?

• A) $416,000.00.
• B) $416,800.00.
• C) $424,242.86.
• D) $416,068.77.
• E) none of the above

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