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Given the following information, find the JPY profits you can make using covered interest arbitrage. Assume you can borrow either EUR 100,000 or JPY 12,603,000.
- Given the following information, find the JPY profits you can make using covered interest arbitrage. Assume you can borrow either EUR 100,000 or JPY 12,603,000.
EUR interest rate = 4% per year
JPY interest rate = 0.6940% per year
S (JPY/EUR) = JPY 126.03 per EUR
F (JPY/EUR) = JPY 111.21 per EUR for 1 year maturity
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Personal Finance Turning Money Into Wealth
Authors: Arthur Keown
8th Edition
0134730364, 978-0134730363
