Today, the US interest rate is 3.3% p.a. while the one-year interest rate in Sweden is 8%

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Today, the US interest rate is 3.3% p.a. while the one-year interest rate in Sweden is 8% p.a. The spot rate for the Swedish Krona is SEK/USD 0.0998. The one-year forward rate of the SEK exhibits a 5% discount. Determine the yield (percentage return on investment) to an investor from Sweden who engages in covered interest arbitrage.

Posted Date: May 19, 2024 07:15 AM

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Today, the US interest rate is 3.3% p.a. while the one-year interest rate in Sweden is 8%

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