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The 3-month interest rate is 1% in Mexico and 3% in Brazil (continuously compounded), while the spot price of the Mexican peso is 1.05 real.
The 3-month interest rate is 1% in Mexico and 3% in Brazil (continuously compounded), while the spot price of the Mexican peso is 1.05 real. The price of a 3-month future is the same. Are there arbitrage opportunities?
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