How large is profit if overall transaction fee is given, Microeconomics

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How large is profit if overall transaction fee is given

Suppose a Canadian investor wants to make a riskless profit on a certain day, say 12/05/2008. His idea is to borrow $1 million Canadian dollar and lend it for three months in US dollar by using Eurocurrency market. He also hedges the US dollar return by using the forward exchange market. The spot and 90 days forward exchange rate on that day are 1.2990 C$/US$ and 1.2987 C$/US$, respectively. Please help this investor calculate his potential profit. The Eurocurrency market data is on the attached file. Be noticed that all the quoted interest rates are annualized and this investor only wants to lend US$ for three months. Assume that the overall transaction fee is $200 Canadian dollar. How large is his profit?

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Microeconomics: How large is profit if overall transaction fee is given

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Microeconomics: How large is profit if overall transaction fee is given

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Recent Questions Asked Microeconomics

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Microeconomics: How large is profit if overall transaction fee is given

Reference No:- TGS064894

Recent Questions Asked Microeconomics

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