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Question ? ( 2 marks ) The following quotes are available in the market . Spot rate SF 1. 0215 Three - month forward rate

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Question ? ( 2 marks ) The following quotes are available in the market ." Spot rate SF 1. 0215 Three - month forward rate SF 1 . 06/5 Three - month interest rate in the United States 5. 4% Three - month interest rate in Switzerland 5. 6% Assume that you can borrow $ 1 , 000 , 000 or its SF equivalent How much profit can the trader make from covered interest arbitrage ? Explain the steps and show your calculations

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