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You see the following quotes: St = $1.2050/, Ft+6 = $1.2100/, i = 4%, and i$ = 3%. (a) Do these rates offer covered interest

You see the following quotes: St = $1.2050/, Ft+6 = $1.2100/, i = 4%, and i$ = 3%.

(a) Do these rates offer covered interest arbitrage opportunity?

(b) If yes, which way the arbitrage capital move? Calculate the arbitrage profit.

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