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Assume you can borrow or lend $1 million at the given interest rate in all countries, and enter both spot and forward exchange market. Can
Assume you can borrow or lend $1 million at the given interest rate in all countries, and enter both spot and forward exchange market. Can you come up with a plan and make money using the currency pair whose LHS and RHS differ the most?
Click to add title \begin{tabular}{|l|r|r|r|r|r|} \hline & & & \multicolumn{2}{|c|}{ Exchange Rate (FCU/USD) } \\ \hline & AverageAnnualInflation20002014 & AverageAnnualInflationAboveUS & AsofJanuary2000 & CAGR FCU \% \\ & 2.17% & & & & \\ Depreciation \end{tabular} Click to add title Percent Inflation Above US, 2000-2014 Click to add title \begin{tabular}{|l|r|r|r|r|r|} \hline & & & \multicolumn{2}{|c|}{ Exchange Rate (FCU/USD) } \\ \hline & AverageAnnualInflation20002014 & AverageAnnualInflationAboveUS & AsofJanuary2000 & CAGR FCU \% \\ & 2.17% & & & & \\ Depreciation \end{tabular} Click to add title Percent Inflation Above US, 2000-2014Step by Step Solution
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