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Does anyone know the current rate of return on a 3 - 5 year Aussie note
or bond? For some reason (looking at a futures quote on a 12% bond), I
believe it to be above 12%. Is this accurate?
Which brings me to my next question ... How effectively can any of these
interest rate differentials (between countries) be taken advantage of?
If I can obtain US capital at 7%, can I make money on an Aussie bond
paying 12% by the time I figure my costs of hedging the currency risk?
(assuming I do not want to hedge the interest rate risk at this time).
Any guidance would be much appreciated.
-Jim Hamer
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