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Assume interest rates in the US area at 1.5% per year, and interest rates in Israel are at 6% per year, and that she shekel
Assume interest rates in the US area at 1.5% per year, and interest rates in Israel are at 6% per year, and that she shekel is trading at 4 shekels/dollar. How much would you make in arbitrage profits if you can borrow $10,000,000 or an equivalent amount of shekels over this time period? What shekel/dollar forward rate implies no arbitrage?
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