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Suppose that the annual interest rate is 4% in the U.S. and 8% in Germany, and that the spot exchange rate is $1.60/ and the

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Suppose that the annual interest rate is 4% in the U.S. and 8% in Germany, and that the spot exchange rate is $1.60/ and the 180 -day forward exchange rate is $1.58/. Assume that an arbitrager can borrow up to $1,000,000 or 625,000. What should he do? What is the net cash flow (profit)

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