Question
You have the following financial market information. You also have 1.86 million Australian dollar (A$) or 3.39 million Thai baht (THB) to make a profit
You have the following financial market information. You also have 1.86 million Australian dollar (A$) or 3.39 million Thai baht (THB) to make a profit due to covered interest arbitrage (CIA). Calculate the profit in A$ or THB if the CIA opportunity exists in the market. (enter the whole number without sign and symbol)
| Bid price | Ask price | |
| THB spot rate | A$0.0458 | A$0.0687 |
| THB one-year forward rate | A$0.0466 | A$0.0694 |
| A$ spot rate | THB22.5623 | THB24.1779 |
| A$ one-year forward rate | THB27.4492 | THB29.4836 |
| Deposit rate | Loan rate | |
| Interest rate on A$ | 2.90% | 4.57% |
| Interest rate on THB | 6.35% | 8.20% |
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