Calculate the dollar profit from the covered interest arbitrage strategy using the information below. Assume...
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Finance
Calculate the dollar profit from the covered interest arbitrage strategy using the information below. Assume you can borrow $1,000,000. Do not round any intermediate calculations (keep at least two decimals). However, enter your final answer without decimals (i.e., 10 and not 9.8)
| Current spot rate of New Zealand dollar (USD/NZD) | 0.61 |
| One-year forward rate of the New Zealand dollar (USD/NZD) | 0.73 |
| Annual interest rate on New Zealand dollars (in %) | 1.37 |
| Annual interest rate on U.S. dollars (%) | 0.81 |
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