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suppose that the current spot exchange rate is euro 0 . 8 0 / $ and the three - month forward exchange rate is euro
suppose that the current spot exchange rate is euro$ and the threemonth forward exchange rate is euro$ the threemonth interest rate is percent per annum in the United States and percent per annum in France. Assume that you can borrow upto $ or euro what is the arbitrage profit in USD and what is the arbitrage profit in Euro.
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