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Assuming FDIC insurance costs 0.40% per year on domestic deposits, and the reserve requirement is 3% on all deposits, what is the effective cost of

Assuming FDIC insurance costs 0.40% per year on domestic deposits, and the reserve requirement is 3% on all deposits, what is the effective cost of 3-month CD paying 9% and e-month Eurodollars offering 9.20%? Which will banks prefer to borrow? What kind of arbitrage is this?

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