Question 1 You have $4,000,000 and have the following information: EUR / US$ spot rate EUR...
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Question 1 You have $4,000,000 and have the following information: EUR / US$ spot rate EUR / US$ forward rate 1-Year US$ deposit rate 1.17 1.19 1.5% 1-Year EUR deposit rate 3% a- is there any opportunity for an arbitrage? if yes, what kind of arbitrage is that? b- how can you benefit from it with the $4m that you have? What will be your profit or loss after 1 year? Question 1 You have $4,000,000 and have the following information: EUR / US$ spot rate EUR / US$ forward rate 1-Year US$ deposit rate 1.17 1.19 1.5% 1-Year EUR deposit rate 3% a- is there any opportunity for an arbitrage? if yes, what kind of arbitrage is that? b- how can you benefit from it with the $4m that you have? What will be your profit or loss after 1 year?
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Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
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