What is possible domestically

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Reference no: EM131300015

Assume the following information:

U.S. investors have $1,200,000 to invest

1-year deposit rate offered on U.S. dollars = .12

1-year deposit rate offered on Singapore dollars = 0.100

1-year forward rate of Singapore dollars = $0.412

Spot rate of Singapore dollar = $0.40

Interest rate parity doesn’t exist and covered interest arbitrage by U.S. investors results in a yield of _______ which is above what is possible domestically.

Reference no: EM131300015

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