Assume you have a foreign currency contract expiring in 3 months. The current price of the future contract is 0.82. Assuming that you have the current exchange rate between domestic currency and foreign currency is 0.83 and the domestic risk free rate is 0.05 and the foreign risk free rate is 0.1 who has the arb opportunity?

Answer rating: 100% (QA)

To determine if there is an arbitrage opportunity in this foreign currency contract we need to compa... View the full answer