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2. (15) Here are some prices in the international money markets: Spot rate 704.40 Chilean peso per US$ 90-day forward rate 718.50 Chilean peso per

2. (15) Here are some prices in the international money markets:

Spot rate 704.40 Chilean peso per US$

90-day forward rate 718.50 Chilean peso per US$

Annual Chile interest rate 9.2%

Annual U.S. interest rate 4.6%

Given this information,

B) Explain adjustments in the financial markets that will eliminate the arbitrage opportunity.

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