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James Clark is a foreign exchange trader with Citibank. He notices the following quotes. Spot exchange rate SF1.2051/$ One-year forward exchange rate SF1.1922/$ One-year $
James Clark is a foreign exchange trader with Citibank. He notices the following quotes.
Spot exchange rate SF1.2051/$
One-year forward exchange rate SF1.1922/$
One-year $ interest rate 2.5% per year
One-year SF interest rate 2.0% per year
Assuming that James Clark is authorized to work with $1,000,000 or SF 1,205,100; compute the arbitrage profit?
a.SF17,243.1
b. $6,036.74
c. SF7,197
d. $31,812.66
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