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7) (6 points) Suppose you observe the following one-year interest rates, spot exchange and futures prices. Futures contracts are available on EUR 10,000. Determine if

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7) (6 points) Suppose you observe the following one-year interest rates, spot exchange and futures prices. Futures contracts are available on EUR 10,000. Determine if there is an arbitrage opportunity. If so, calculate the risk-free arbitrage profit you could make on one contract at maturity. If no arbitrage opportunity exists, explain why. 1.6500 S(USD/EUR) F360 (USD/EUR) 1.6800 ius 5% EU 6%

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