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You have $2,000,000 to invest: Current spot rate of EUR = $1.12 90-day forward rate of EUR = $1.15 1-Year deposit rate in U.S. =
- You have $2,000,000 to invest:
Current spot rate of EUR | = | $1.12 |
90-day forward rate of EUR | = | $1.15 |
1-Year deposit rate in U.S. | = | 4% |
1-Year deposit rate on EUR | = | 3% |
is there any opportunity for an arbitrage? if yes, what kind of arbitrage is that? how can you benefit from it if you have two million dollars? What will be your profit or loss after 3 months?
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