This problem has been solved!
Do you need an answer to a question different from the above? Ask your question!
As a Malaysia-based investor, you have MYR100,000 to invest for 6 months either in Malaysia at 6% per annum or United States at 3% per annum. The current spot rate is MYR 4.3215/USD and 6-month forward rate is MYR4.3420/USD. Does interest rate parity exist? Where should you invest?
Expert Answer
To determine if interest rate parity exists, we need to compare the returns
View the full answer
Related Book For 
Financial Theory and Corporate Policy
4th edition
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
ISBN: 978-0321127211
Post a Question and Get Help
Cannot find your solution?
Post a FREE question now and get an answer within minutes*.
*Average response time.