The treasurer of a major U.S. firm has $30 million to invest for three months. The annual
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The treasurer of a major U.S. firm has $30 million to invest for three months. The annual interest rate in the United States is .40 percent per month. The interest rate in Great Britain is .70 percent per month. The spot exchange rate is £.59, and the three-month forward rate is £.61. Ignoring transactions costs, in which country would the treasurer want to invest the company’s funds? Why?
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To determine where the treasurer should invest the companys funds we need to compare the returns on ...View the full answer
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9780072553079
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
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