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The spot rate: USD 1.21/EUR 2-year USD YTM=0.11% 2-year EUR YTM=-0.72%. Assume that the 2-year forward rate is USD 1.21/EUR. Is there an arbitrage opportunity?

The spot rate: USD 1.21/EUR

2-year USD YTM=0.11%

2-year EUR YTM=-0.72%.

Assume that the 2-year forward rate is USD 1.21/EUR. Is there an arbitrage opportunity? compute the profit if you can borrow up to USD 1,000,000 (or the equivalent in EUR). please round to the nearest US cent.

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