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Assume that S(SEK/DKK) = 1.42 and that F(SEK/DKK) = 1.4309. The interest rate in Denmark is -0.75%, while the interest rate in Sweden is 0%.

Assume that S(SEK/DKK) = 1.42 and that F(SEK/DKK) = 1.4309. The interest rate in Denmark is -0.75%, while the interest rate in Sweden is 0%. Also assume that you can invest either DKK 1,000,000 or SEK 1,000,000. Can you make an arbitrage profit? If so, why? Show the transactions and compute the arbitrage profit.

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