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U.S. interest rate is 5.50%, Yen interest rate is 2%, exchange rate 129Y per USD; You are borrowing 1,000,000 Y and planning to do carry
U.S. interest rate is 5.50%, Yen interest rate is 2%, exchange rate 129Y per USD; You are borrowing 1,000,000 Y and planning to do carry trade investing it in US.
A) If in 1 year from now the exchange rate is 145 Y per USD, which is your gain (loss) measured in USD from this operation?
B) If in 1 year from now, the exchange rate is 115 Y per USD which is your gain (loss) measured in USD from the strategy?
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
