Question
If I borrow $810,000 for one year. The one-year interest rate is 7.50% in the U.S. and 4.10% in the euro zone. The spot exchange
If I borrow $810,000 for one year. The one-year interest rate is 7.50% in the U.S. and 4.10% in the euro zone. The spot exchange rate is $1.5791/1.00 and the one-year forward exchange rate is $1.6558/1.00. What arbitrage profit results if I borrow the maximum available funds?
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Derivatives Markets
Authors: Robert L. McDonald
2nd Edition
032128030X, 978-0321280305
