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ii. Compute the profit in both currencies if an arbitrager initially invests fifty thousand dollars. (9 marks) The current spot exchange rate for the 1000

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ii. Compute the profit in both currencies if an arbitrager initially invests fifty thousand dollars. (9 marks)

The current spot exchange rate for the 1000 Indonesian Rupiah is USD0.0698. The following information are given for your further analysis: 9-month forward Foreign currency is expected to be at 0.7% discount Indonesia United States Annual interest rate 4% 4.2%

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