Question 22 A currency dealer can borrow $1,450,000 (or the equivalent in euros) for one year. The one-year interest rate is 4.30% in the U.S. and 8.40% in the euro zone. The spot exchange rate is $1.2936/1.00 and the one-year forward exchange rate is $1.2577/1.00. What arbitrage profit results if the trader borrows the maximum available funds? Question 22 options:

$15,829.39 OR 12,585.98

$78,401.94 OR 62,337.55

$59,450.00 OR 47,268.82

$20,261.62 OR 16,110.06

$107,410.66 OR 85,402.45

$12,585.98 OR 10,007.14

Question 23 A currency dealer can borrow $1,400,000 (or the equivalent in euros) for one year. The one-year interest rate is 6.80% in the U.S. and 4.20% in the euro zone. The spot exchange rate is $1.2128/1.00 and the one-year forward exchange rate is $1.2597/1.00. What arbitrage profit results if the trader borrows the maximum available funds? Question 23 options:

$77,688.53 OR 61,672.25

$36,400.00 OR 28,895.77

$9,850.03 OR 7,819.35

$100,995.09 OR 80,173.92

$15,887.14 OR 15,887.14

$20,013.03 OR 15,887.14