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You need a loan in currency Z for a very profitable opportunity in country Z. However, that country only allows z-nationals to borrow/lend inside their
You need a loan in currency Z for a very profitable opportunity in country Z. However, that country only allows z-nationals to borrow/lend inside their country. Find a synthetic to a z-denominated loan of Z200. If eZ/$ = 20, FZ/$ = 20.5, i$ = 2%, what iZ would allow no arbitrage from Z-nationals? Find all the inflows and outflows (actual numbers) involved in the synthetic.
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