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2. Assume the following information: Spot rate of = $1.60 180 day forward rate of f = $ 1.56 180 day British interest rate =

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2. Assume the following information: Spot rate of = $1.60 180 day forward rate of f = $ 1.56 180 day British interest rate = 4% 180 day US interest rate = 3% Is covered interest arbitrage by US investor feasible? If so, mention the steps of the arbitrage and calculate the profit, in the investor had $1 million. (4)

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