Homework answers / question archive / Assume that you are the CFO of a large company that has a lot of cash, the CEO of the company wants to invest some the cash temporarily either in 90 days US treasury in dollars or 90 days French government security in Euro:  You are asked for advice and you are given the following information: E Let (NY = 90-day interest rate in New York

Assume that you are the CFO of a large company that has a lot of cash, the CEO of the company wants to invest some the cash temporarily either in 90 days US treasury in dollars or 90 days French government security in Euro:  You are asked for advice and you are given the following information: E Let (NY = 90-day interest rate in New York

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Assume that you are the CFO of a large company that has a lot of cash, the CEO of the company wants to invest some the cash temporarily either in 90 days US treasury in dollars or 90 days French government security in Euro: 
You are asked for advice and you are given the following information: E Let (NY = 90-day interest rate in New York. Let it Aris = 90-day interest rate in Paris. Let E (el = the expected spot rate in 90 d.%,, 
Your paper must encompass the followings: 
E The variables to include in your report to the CEO of your company must demonstrate the most profitable investment for the company at the lowest risk. 
E The five steps of calculations in your textbook (Chapter 14) to be explained, put in notation, and be converted into a mathematical formula. 
L Your advice to the CEO must be based on: 
1. The interest rate differential between the two countries remains constant. 
2. The current status of interest rates in the two countries will change. 
C Provide the equation that exhibits the state of equilibrium between the money market and the foreign exchange market in these two countries. 
C] Explain why this equation represents the Interest Rate Parity theorem?