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Question 3 A foreign exchange trader (base in Norway) sees the following prices on his computer screen: Sport rate, Norwegian krone per dollar: NKr8.8181/$ 3-month

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Question 3 A foreign exchange trader (base in Norway) sees the following prices on his computer screen: Sport rate, Norwegian krone per dollar: NKr8.8181/$ 3-month forward rate: NKr8.9169/$ U.S. 3-month treasury bill rate: 2.60% pa Norwegian 3-month treasury bill rate: 4.00% pa Could the trader profit by placing USD500,000 of principal in a covered interest arbitrage operation in Norway

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