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How do I do this? (Data Below) Arbitrage funds available ($) 3,000,000 Spot exchange rate (Nok=$1.00) 6.0313 3-month forward rate (Nok=$1.00) 6.0188 U.S. dollar 3-month

How do I do this? (Data Below)

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Arbitrage funds available ($) 3,000,000 Spot exchange rate (Nok=$1.00) 6.0313 3-month forward rate (Nok=$1.00) 6.0188 U.S. dollar 3-month interest rate (%) 5.001 Norwegian krone 3-month interest rate (%) 4.451

Equinor's Corporate Arbitrage. Equinor, the national oil company of Norway, is a large, sophisticated, and active participant in both the currency and petrochemical markets. Although it is a Norwegian company, because it operates within the global oil market, it considers the U.S. dollar, rather than the Norwegian krone (Nok), as its functional currency. Ari Karlsen is a currency trader for Equinor and has immediate use of either $3 million (or the Norwegian krone equivalent). He is faced with the following market rates,_, and wonders whether he can make some arbitrage profits in the coming 90 days. The CIA profit potential is %, which tells Ari Karlsen he should borrow and invest in the yielding currency, the _selling the dollars forward 90 days, and therefore earn covered interest arbitrage (CIA) profits. (Round to four decimal places and select from the drop-down menus.)

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