Question: Please use this data to answer the following three questions: Assume that USA interest rate is 6%; Mexico the interest rate is 2% spot rate
Please use this data to answer the following three questions: Assume that USA interest rate is 6%; Mexico the interest rate is 2% spot rate now now is $0.50/Peso. Spot rate one year later is:$0.51/peso; Find the uncovered return from the USA point of view a)5.12% b)3.92% c)8.16% d)4.04% 45) Find the Uncovered return from Mexico's point of view a)5.11% b)3.92% c)1.96% d)6.88% 46) Assume that you had $100,000 or equivalent amount which is 200,000 Pesos. How much in arbitrage profit will you make using the above strategy? a) 2780 peso b) 4560 peso c) 3840 peso d) 3220 peso 47) Assume that the following quotes are given at different locations by traders: New York: USD/Peso: 0.075; Chicago: USD/Franc: 1.05; Geneva: Franc/Peso: 0.069. USD is LiS dollar; All are direct quotes in NY and Chicago. If you have access to $3 Million now. how much profit will you make doing the triangular arbitrage with this set of information. a)$ 124.780 b)$98.455 c)$246.877 d)S105.590
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