Question: foreign exchange problem ates between Bangladesh Taka (BDT) and US Dollar (USD) terest rates in Bangladesh and the US are 9% and 7% respectively you

foreign exchange problem

ates between Bangladesh Taka (BDT) and US Dollar (USD) terest rates in Bangladesh and the US are 9% and 7% respectively you have the borrowing capacity of USD 4,000 or equivalent BDT. The above information, calculate the 2 years forward exchange rate of BDT per USD. ear forward exchange rate in the market turns to be BDT 81.2 per USD, how you profit from arbitraging? would your strategy change if the forward exchange rate turns to be BDT 77.50 per USD? much would be the profit from arbitraging if your borrowing capacity remains same

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