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4 . On 23` February a bank offers a two - month GBP / USD forward exchange rate of $ 1. 3300 . Show how

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4 . On 23"` February a bank offers a two - month GBP / USD forward exchange rate of $ 1. 3300 . Show how an arbitrageur could profit and comment on the forward rate in relation to the principle of covered interest rate parity . ( You might find the point easier to discuss by assuming the arbitrageur puts into play a Specific sum of money )

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