LOTTERY CASE STUDY

Lottery Case Study

Lottery Case Study

Winning Amount in US Dollars

Winning Amount €1million

Exchange Rate $1 = €0.7

€0.7 = $1

€1 = $1/0.7

€1 Million = $1.43 Million

€1Million Left In Ireland

Interest Rate = 2%

Amount Earned in a year = 1*1.02 = €1.02 Million

Amount Earned in a year = 1.43*1.04 = $1.49 Million

Changed Exchanged Rate

Winning Amount €1million

Exchange Rate $1 = €0.65

€0.65 = $1

€1 = $1/0.65

€1 Million = $1.54 Million

It would be better-off to take the earnings back home as the interest rate in USA is more than Ireland.

Covered Interest Arbitrage

Covered spare-time activity arbitrage is a deal in a foreign currency set spare-time ...