公司理财教材新chap020.pptVIP

$1,071 = ￡892.48 × ￡1 $1.20 Bring it on back to the U.S.A. $1,000 ￡800 ￡800= $1,000× ￡1 $1.25 Invest ￡800 at i￡ = 11.56% In one year ￡800 will be worth ￡892.48 = $1,000?(1+ i￡) Domestic FV = $1,071 and British FV = $1,071 Transactions Costs The interest rate available to an arbitrageur for borrowing, ib,may exceed the rate he can lend at, il. There may be bid-ask spreads to overcome, Fb/Sa F/S Thus (Fb/Sa)(1 + i￥l) ? (1 + i￥ b) ? 0 Capital Controls Governments sometimes restrict import and export of money through taxes or outright bans. Combining PPP and UIP we can get the International Fi