2-1exchangerateandforeignexchangetransactions.pptVIP

Chinese Finance Research Institute II. Forward Exchange Market II.1 Concepts Delivered at a predetermined date in the contract. II.2 Interest Arbitrage e.g.2-1-4. Suppose the deposit interest rate in London is 8% annually, and 10% in New York. This simply means there is an interest spread of 2% and a potential profit when transferring funds from London to New York. Is it the case? Suppose again, a British has ￡100 million, and he or she deposits the money in a bank running its businesses in London. Foreign Exchange Transactions A year later, the British will receive an inco