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Suppose that the U.S. interest rate on one year Treasury notes was 4.1%. We will use this as the annual interest rate in the U.S.

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Suppose that the U.S. interest rate on one year Treasury notes was 4.1%. We will use this as the annual interest rate in the U.S. And suppose that the interest rate on the one-year German Treasury note was 2.25\%. The spot rate is .9877 EUR/USD. And the 6-month forward rate is .9992. Eur/USD, Is there an opportunity for covered interest arbitrage? If so, what would be the total profit if we borrowed $25 miliion? A. YES. $51,665.34 would be the profit B. YES- $53,385.41 would be the profit C. YES- \$63,104.94 would be the profit D. NO- there is no opportunity for a profit

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