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Assume the following information:

1-year interest rate on U.S. dollars = 10.2%

1-year interest rate on Singapore dollars = 9.4%

Spot rate of Singapore dollar = 0.4 USD/SGD

1-year forward premium on Singapore dollars = 3.78%

Given this information, how much profit can be made with covered interest arbitrage, by borrowing 1 million USD?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92846449

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