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You are an American Investor. You face the following prices: Prices Bid Ask Spot (USD/EUR) 1.1745 1.1750 3-m Forward(USD/EUR) 1.1725 1.1745 Interest rate US (%

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You are an American Investor. You face the following prices: Prices Bid Ask Spot (USD/EUR) 1.1745 1.1750 3-m Forward(USD/EUR) 1.1725 1.1745 Interest rate US (% p.a.) 3.000 5.000 Interest rate EUR (% p.a.) 3.000 4.000 These prices account for the presence of transaction costs in both foreign exchange markets (bid and ask rates) and money markets.(borrowing and lending rates) The maximum profit today from arbitraging between these opportunities for an American investoris Gain $209 per $100K invested. Gain $250 per $100K invested. Gain $706 per $100K invested. Gain $458 per $100K invested. Neither gain nor lose any Sper $100K invested. You are an American Investor. You face the following prices: Prices Bid Ask Spot (USD/EUR) 1.1745 1.1750 3-m Forward(USD/EUR) 1.1725 1.1745 Interest rate US (% p.a.) 3.000 5.000 Interest rate EUR (% p.a.) 3.000 4.000 These prices account for the presence of transaction costs in both foreign exchange markets (bid and ask rates) and money markets.(borrowing and lending rates) The maximum profit today from arbitraging between these opportunities for an American investoris Gain $209 per $100K invested. Gain $250 per $100K invested. Gain $706 per $100K invested. Gain $458 per $100K invested. Neither gain nor lose any Sper $100K invested

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