Question
You are a forex arbitrage trader in Hong Kong. You observe the following quotes on your Bloomberg terminal: Spot $/CAD 0.6793 0.6803 3-month Forward $/CAD
You are a forex arbitrage trader in Hong Kong. You observe the following quotes on your Bloomberg terminal:
| Spot $/CAD | 0.6793 | 0.6803 |
|
| 3-month Forward $/CAD | 0.6800 | 0.6820 |
|
| Interest rate $ | 6.0625 | 6.1875 | % per annum (APR) |
| Interest rate CAD | 4.0000 | 4.1250 | % per annum (APR) |
What would you do? Describe the necessary transactions and state your profit in CAD. Provide your steps and explain your answers.
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New Venture Creation A Framework For Entrepreneurial Start-ups
Authors: Paul Burns
2nd Edition
1352000504, 978-1352000504
