Business, 22.07.2019 23:30 abel341

While you were visiting london, you purchased a jaguar for £35,000, payable in three months. you have enough cash at your bank in new york city, which pays 0.35% interest per month, compounding monthly, to pay for the car. currently, the spot exchange rate is $1.45/£ and the three-month forward exchange rate is $1.40/£. in london, the money market interest rate is 5.0% for a three-month investment. there are two alternative ways of paying for your jaguar. (a) keep the funds at your bank in the u. s. and buy £35,000 forward. (b) buy a certain pound amount spot today and invest the amount in the u. k. for three months so that the maturity value becomes equal to £35,000. evaluate each payment method. which method would you prefer? why

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While you were visiting london, you purchased a jaguar for £35,000, payable in three months. you hav...

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