question archive question 8 a) One-year interest rate in New Zealand is 5
question 8 a) One-year interest rate in New Zealand is 5
Subject:BusinessPrice: Bought3
question 8
a) One-year interest rate in New Zealand is 5.5 percent and one-year Malaysian interest rate is 4.0 percent. The spot rate of the New Zealand dollar (NZD) is MYR2.8250. The forward rate of the New Zealand dollar is MYR2.8145. For an initial investment of MYR1,000,000, is covered interest arbitrage feasible for Malaysian investors? Support your answer with the arbitrage profits or losses.
b) You are given the following exchange rates: EUR/USD: 1.1342 - 86, BND/USD: 0.7231 - 70
Given the information above, calculate the bid and ask for quotations for euro in Bruneian dollar (EUR/ BND).
