Question
A currency trader can borrow the equivalent of $1,000,000 (in either $s or s) for one year. The one-year $US interest rate is 2%; the
A currency trader can borrow the equivalent of $1,000,000 (in either $s or s) for one year. The one-year $US interest rate is 2%; the one-year Euro interest rate is 6%. The spot rate is $/ 1.25 and the one-year forward rate is $/ 1.20.
How much profit can be realized via covered interest arbitrage?
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Crime And Punishment In The Future Internet
Authors: Sanja Milivojevic
1st Edition
036746800X, 978-0367468002
