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Currently the spot exchange rate is $ 1 . 7 0 per euro and the three month forward exchange rate is $ 1 . 7

Currently the spot exchange rate is $

1.70

per euro and the three month forward exchange rate is $

1.72 .

Determine whether the interest rate parity is currently holdinG

If the IRP is not holding how would you carry out covered interest arbitrage? What will be your arbitrage profit

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