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(1) A US. MNC would like to invest its extra cash reserve of $1,500,000 for 3 months. How should the extra cash reserve be invested? Explain with calculations.
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Order Paper Now(2) Describe the covered interest arbitrage (CIA) by a dollar-based investor if such opportunity exists. Calculate the investor’s CIA profit if any.
(3) Describe the covered interest arbitrage (CIA) by a pound-based investor if such opportunity exists. Calculate the investor’s CIA profit if any.
(4) Based on the given information, specify how CIA activities help restore the market equilibrium described by interest rate parity (IRP).