In 2010 many investors borrowed money in countries such as the United States and Japan, where interest

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In 2010 many investors borrowed money in countries such as the United States and Japan, where interest rates were low, and invested the money in countries such as Australia and South Africa, where rates were high. This is called a "carry trade." What is the risk in these carry trades? Could you eliminate this risk by entering into a forward exchange contract and still make money? Explain.
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Fundamentals of Corporate Finance

ISBN: 978-0078034640

7th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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