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How much arbitrage profit can you obtain with the following information? Hint. Covered interest arbitrage Spot exchange rate: 1 . 1 Euro / dollar Forward

How much arbitrage profit can you obtain with the following information?

Hint. Covered interest arbitrage

Spot exchange rate:

1.1

Euro

/

dollar

Forward exchange rate:

1

Euro

/

dollar

Risk free rate in U

.

3 %

Risk free rate in Europe:

2 %

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