Question
The spot rate between Canada and the U.S. is Can$1.2449/$, while the one-year forward rate is Can$1.2448/$. The risk-free rate in Canada is 4.65 percent
The spot rate between Canada and the U.S. is Can$1.2449/$, while the one-year forward rate is Can$1.2448/$. The risk-free rate in Canada is 4.65 percent and risk-free rate in the United States is 2.77 percent. How much in profit can you earn on $12,500 utilizing covered interest arbitrage?
Multiple Choice
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$236.05
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$233.95
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$206.54
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$188.84
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$263.19
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Bond Markets Analysis And Strategies
Authors: Frank J. Fabozzi
4th Edition
0130402664, 9780130402660
