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Suppose you have $ 1,000,000 and wish to speculate on the Swiss Franc. Current 90- day forward rate is SF 1.60/$. You believe that spot

Suppose you have $ 1,000,000 and wish to speculate on the Swiss Franc. Current 90- day forward rate is SF 1.60/$. You believe that spot in 90- days will be SF 1.65/$.

Is it possible for dealer to make an arbitrage profit? If yes, show how. If no, explain why.

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