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Short-term rates are 2% in Japan and 4% in the United States. The current exchange rate is 120 yen per dollar. lf you can enter

Short-term rates are 2% in Japan and 4% in the United States. The current exchange rate is 120 yen per dollar.

lf you can enter into a forward exchange rate of 115 yen per dollar, how can you arbitrage the situation?

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