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Suppose you observe the following exchange rates: S ( $ / ) = 1 . 3 . The one - year forward rate is F
Suppose you observe the following exchange rates: S$ The oneyear forward rate is F$ The riskfree interest rate in the US is and in UK it is You can borrow either $ or
Briefly and clearly explain your arbitrage strategy. Show your work in each step to receive partial credits.
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