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Consider the following example of arbitrage opportunity: $1= Eur 1 $1= L 1 Eur 1=L 2 If you borrow Eur 1, you can buy _____
Consider the following example of arbitrage opportunity: $1= Eur 1 $1= L 1 Eur 1=L 2 If you borrow Eur 1, you can buy _____ L; but then with that amount of L, you can obtain _____ $, and convert them into _____Eur. This gives you a risk free profit (assuming for simplicity 0 interest on your loan) of ______Eur.
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