FIN370-Interest Rates and Arbitrage [LO2]The treasurer of a major

FIN370-Interest Rates and Arbitrage [LO2]The treasurer of a major

Question # 00504803 Posted By: rey_writer Updated on: 03/27/2017 08:24 AM Due on: 03/27/2017
Subject Finance Topic Finance Tutorials:
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7. Interest Rates and Arbitrage [LO2]The treasurer of a major U.S. firm has $30 million to invest for three months. The interest rate in the United States is .31 percent per month. The interest rate in Great Britain is .34 percent per month. The spot exchange rate is £.573, and the three-month forward rate is £.575. Ignoring transaction costs, in which country would the treasurer want to invest the company’s funds? Why?

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