Business, 15.02.2021 20:20 gunnatvinson

I am looking to safely invest 1 billion pounds in cash for the next year - assuming that I start in pounds and end in pounds. I have 3 alternatives: 1) a pound bank account with an interest rate of 3.0%,
2) a yen bank account with an interest rate of 4%,
and 3) a dollar bank of account with an interest rate of 2%.
The following spot and forward quotes are observed in the currency markets:
Spot 0L/$ = L1.00/$
Spot 0L/Y = L0.0100/Y
Forward 1 year L/$ = L1.01/$
Forward 1 year L/Y = L0.0099/Y
Rank my alternatives - Show your supporting calculations:
Account to Invest in
Rank (1, 2, of 3)
Pounds
Yen
Dollars

Answers: 2

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I am looking to safely invest 1 billion pounds in cash for the next year - assuming that I start in...

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