The spot rate is ¥110 per dollar. Assume that speculator buys ¥10,000 today and invests the amount in a yen
denominated bond. The interest rate earned is 1%. One year later the spot rate turns out to be ¥105. What is
the rate of return earned by the speculator?

Answer rating: 100% (QA)

To calculate the rate of return earned by the speculator we will first determine the initial cos... View the full answer