Question: Hi there, can u help me with this question Semester 1, 2011 Question 2 a) John Mcdonald, a foreign exchange trader, at ABC Bank, can

Hi there, can u help me with this question

Semester 1, 2011 Question 2 a) John Mcdonald, a foreign exchange trader, at ABC Bank, can invest $10,000,000 or the foreign currency equivalent (in Danish Krone) in a covered interest arbitrage with Denmark. Using the following quotes, show whether John McDonald can make a covered interest arbitrage profit, and state how much. Show all calculations. Spot exchange rate: Dkr 6.1720 = AUD1.0000 Three-month forward rate: Dkr 6.1980 = AUD1.0000 Three month AUD interest rate: 3.0% per annum. Three month Dkr interest rate: 5.0% per annum.Semester 2 2011 Question 3 (a) Angus McGuinness, a foreign exchange trader, at Scotland Bank, can invest 20,000,000 pounds (GBP) or the foreign currency equivalent (in Swiss francs) in a covered interest arbitrage with Switzerland. Using the following quotes, show whether Angus McGuinness can make a covered interest arbitrage profit, and state how much. Show all calculations. Spot exchange rate: SF1.3392 = GBP 1.0000 Three-month forward rate: SF1.3286 = GBP1.0000 Three month GBP interest rate: 4.80% per annum. Three month SF interest rate: 3.60% per annum

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