If you utilise the spot and forward markets to invest in, Financial Management

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If you utilise the spot and forward markets to invest in

You have £1,000,000 to invest for 3 months – take 3 months to be exactly 0.25 of a year.

Current spot rate of pound = $1.50

90 day forward rate of pound = $1.45

3 month deposit rate in U.S. = 12% pa

3 month deposit rate in UK = 20% pa

If you utilise the spot and forward markets to invest in the USA, what will be your US return compared to your UK return?

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