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Covered Interest Arbitrage in Both Directions
Covered Interest Arbitrage in Both Directions 1. Covered Interest Arbitrage in Both Directions . Assume that the existing U.S. one year interest rate is 10 percent and the Canadian one year interest rate is 11 percent. Also assume that interest rate parity exists. Should the forward rate of the Canadian dollar exhibit a discount or a premium? If U.S. investors attempt covered interest arbitrage, what will be their return? If Canadian investors attempt covered interest arbitrage, what will be their return? 2. Interest Rate Parity. Why would U.S. investors consider covered interest arbitrage in France when the interest rate on euros in France is lower than the U.S. interest rate? Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help
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16 Apr 2016
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Covered Interest Arbitrage in Both Directions
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