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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 euro0.80/$ and the three-month forward exchange rate is euro0.7813/$. the three-month interest rate is 5.60 percent per annum in the United States and 5.40 percent per annum in France. Assume that you can borrow upto $1,000,000 or euro 800,000. what is the arbitrage profit in USD and what is the arbitrage profit in Euro.

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