Covered Interest Arbitrage The spot and 360-day forward rates on the Turkish lira to the euro are
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Covered Interest Arbitrage The spot and 360-day forward rates on the Turkish lira to the euro are L2.1/€ and L1.9/€, respectively. Assume that the risk-free interest rate in Europe is 6 per cent, and the risk-free rate in Turkey is 4 per cent. Is there an arbitrage opportunity here? How would you exploit it?
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9780077178239
3rd Edition
Authors: David Hillier, Iain Clacher, Stephen A. Ross
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