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Consider the following interest rates, and spot and forward exchange rates. Can an investor earn an arbitrage profit? Borrowing Lending Bid Ask $ 5% 4.5%
Consider the following interest rates, and spot and forward exchange rates. Can an investor earn an arbitrage profit?
Borrowing
Lending
Bid
Ask
$
5%
4.5%
Spot
$1.00 = 1.00
$1.01 = 1.00
6%
5.5%
Forward
$0.99 = 1.00
$1.00 = 1.0
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Capital As Power
Authors: Jonathan Nitzan, Shimshon Bichler
1st Edition
0415496802, 978-0415496803
