Carry Trade E) Carry Trade generally refers to foreign exchange trading, that is, a currency with low interest rates, and then buying and holding currencies with higher returns to earn to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn currencies in order Pigraphy. I assume that the one -year pound deposit interest rate is 5.5%, the US dollar deposit interest rate at the same period is 5%, and the spread between them is 0.5%. Assuming that the current exchange rate between them is 1 pound = 1.5 US dollars, then if the exchange rate fluctuation factors are not considered, the sum of the principal and interest of a one -year deposit of $ 1,500 is $ 1575 [1500 × (1 5%)], and it will be folded into it. £ 1050 (1575 ÷ 1.5). However, if the $ 1500 was exchanged for £ 1,000, the principal and interest of the year was 1055 pounds [1000 × (1 5.5%)]. In short, the same amount of deposit is 0.5%more spread than the US dollar. , but this can only be achieved when the exchange rate is unchanged. In other words, if the exchange rate between them fluctuates at the expiration of one year's deposit period, the sum of the 1055 pound of pound deposits is equivalent to USD 1561.4 (1055 × 1.48) with the pound of pound deposits (1055 × 1.48). The US dollar deposit is less than $ 13.6 (1575-1561.4), which is because the difference between the pound and the US dollar in the year is 1.33%[(1.50-1.48) / 1.50]. Therefore, in the case of the difference between the exchange difference, arbitrage transactions are worthless. In fact, due to the supply and demand, the long -term exchange rate of high interest rates in the foreign exchange market will indeed decrease, and the situation where the exchange difference is greater than the spread. Therefore, in arbitrage transactions, the factors of the difference and spread must be comprehensively considered. Of course, if there is a long -term foreign exchange trading market, people can use the method of swaps to avoid the risk of exchange rate fluctuations and earn spreads. This approach is called supplementary arbitrage. The spread is to give the exchange rate the way to achieve arbitrage to make money
Carry Trade E) Carry Trade generally refers to foreign exchange trading, that is, a currency with low interest rates, and then buying and holding currencies with higher returns to earn to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn currencies in order Pigraphy.
Carry Trade E) Carry Trade generally refers to foreign exchange trading, that is, a currency with low interest rates, and then buying and holding currencies with higher returns to earn to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn currencies in order Pigraphy.
I assume that the one -year pound deposit interest rate is 5.5%, the US dollar deposit interest rate at the same period is 5%, and the spread between them is 0.5%. Assuming that the current exchange rate between them is 1 pound = 1.5 US dollars, then if the exchange rate fluctuation factors are not considered, the sum of the principal and interest of a one -year deposit of $ 1,500 is $ 1575 [1500 × (1 5%)], and it will be folded into it. £ 1050 (1575 ÷ 1.5). However, if the $ 1500 was exchanged for £ 1,000, the principal and interest of the year was 1055 pounds [1000 × (1 5.5%)]. In short, the same amount of deposit is 0.5%more spread than the US dollar.
, but this can only be achieved when the exchange rate is unchanged. In other words, if the exchange rate between them fluctuates at the expiration of one year's deposit period, the sum of the 1055 pound of pound deposits is equivalent to USD 1561.4 (1055 × 1.48) with the pound of pound deposits (1055 × 1.48). The US dollar deposit is less than $ 13.6 (1575-1561.4), which is because the difference between the pound and the US dollar in the year is 1.33%[(1.50-1.48) / 1.50]. Therefore, in the case of the difference between the exchange difference, arbitrage transactions are worthless. In fact, due to the supply and demand, the long -term exchange rate of high interest rates in the foreign exchange market will indeed decrease, and the situation where the exchange difference is greater than the spread. Therefore, in arbitrage transactions, the factors of the difference and spread must be comprehensively considered. Of course, if there is a long -term foreign exchange trading market, people can use the method of swaps to avoid the risk of exchange rate fluctuations and earn spreads. This approach is called supplementary arbitrage. The spread is to give the exchange rate the way to achieve arbitrage to make money
Carry Trade E) Carry Trade generally refers to foreign exchange trading, that is, a currency with low interest rates, and then buying and holding currencies with higher returns to earn to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn more benefits to earn currencies in order Pigraphy.
Are you talking about something bad, right?