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You observe that the NZD/USD spot exchange rate (i.e., the price of 1 New Zealand Dollar in terms of U.S. Dollars) is 0.7234 and the
You observe that the NZD/USD spot exchange rate (i.e., the price of 1 New Zealand Dollar in terms of U.S. Dollars) is 0.7234 and the 3-month NZD/USD forward exchange rate is quoted at 0.7212.
- Does an arbitrage opportunity exist given that the 3-month deposit rates in New Zealand and the U.S. are 0.35% and 0.08% per annum, respectively?
- If so, outline an arbitrage strategy and explain step-by-step why your strategy yields risk-free profits.
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Banking Reforms And Monetary Policy In The Peoples Republic Of China
Authors: Yong Guo
1st Edition
1403900787,1403914540
