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Suppose that three-month interest rates (annualized) in Japan and the U.S. are 7% and 9%, respectively. If the spot rate is 142:$1 and the 90-day

Suppose that three-month interest rates (annualized) in Japan and the U.S. are 7% and 9%, respectively. If the spot rate is 142:$1 and the 90-day forward rate is 139:$1: Which trading strategy would lead to arbitrage opportunity if there is any?

		Borrow in US and invest in Japan
		Borrow in Japan and invest in US
		There is no arbitrage opportunity

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