Question: How do You solve this? Show your work? Suppose you observe the following one-year interest rates, spot exchange rates and future on one contract at

How do You solve this? Show your work? Suppose you observe

How do You solve this? Show your work?

Suppose you observe the following one-year interest rates, spot exchange rates and future on one contract at maturity from this mispricing? Exchange Rate Interest Rate APR So(S/) $1.45 1.00 F360(S/) $1.48- 1.00 is 4% le 3% A) $159.22 C $153.10 B) $439.42 D) none of the options Answer: A

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