Question
1. Using the following information, answer the next two questions. spot CAD US Deposit Rate 4.50% 0.25% Borrowing Rate 6.50% 1.75% You have borrowing capacity
1. Using the following information, answer the next two questions.
| spot | ||
| CAD | US | |
| Deposit Rate | 4.50% | 0.25% |
| Borrowing Rate | 6.50% | 1.75% |
You have borrowing capacity of 1 million in each currency. What is the arbitrage profit? Use your local currencyThe local currency is USD because you can only make profit from the US side. I need to borrow from the US Bank to make the CIA work. The profit is in USD.
True
False
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Personal Finance
Authors: Thomas Garman, Raymond Forgue
12th edition
9781305176409, 1133595839, 1305176405, 978-1133595830
