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Assume that U.S. Companies can invest funds for one year in the United States at 2% or invest funds in Mexico at 4%. The spot

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Assume that U.S. Companies can invest funds for one year in the United States at 2% or invest funds in Mexico at 4%. The spot rate of the peso is $0.10 while the one-year forward rate of the peso is $0.10. a) Is there an arbitrage opportunity? Show your proof. b) If observing an artitrage opportunity, what might be your actions with $1 m USD? What is your arbitrage profit? c) What might be the impacts on the spot and forward rates

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