(Answered) A foreign exchange dealer in tokyo provides the following

Accounting

A foreign exchange dealer in Tokyo provides the following quotes for spot exchange and 3-month forward exchange between the Malaysian ringgit (MR) and the U.S. dollar:

	Bid (MR/$)	Ask (MR/$)
Spot	4.0040	4.0200
3-month forward	3.9690	3.9888

a. In New York, 3-month U.S. Treasury bills yield 7 percent per annum. What should be the annualized yield on 3-month Malaysian government bills? Use U.S. dollar ask quotes for simplicity.

b. Verify your answer to part a. with a hypothetical investment of $10 million for three months in each country. Use only ask quotes for simplicity and ignore other fees, charges, and taxes.

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