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Calculate the % return from covered interest arbitrage by US investors with US$1,000,000 to invest based on following assumptions: Spot rate of = $1.11 Future
- Calculate the % return from covered interest arbitrage by US investors with US$1,000,000 to invest based on following assumptions:
Spot rate of = $1.11
Future spot rate of =$1.08
1-year forward rate of =$1.15
Annual interest rate in Europe= 2%
Annual interest rate in the US= 0.5%
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