US arbitrageur is looking for arbitrage opportunities . the one year interest rate offered in the US is 3% while the one year interest rate offered in bolivia is 12 % . the spot rate rate is 7.20 BOL/USD that is , bolivian pesos 7.20 per USD . Ms Chambers is offered a one year forward contracta t 7.30 BOL/USD. Assume you have BOL 3600,000. Calcule arbitrage profit.

Answer rating: 100% (QA)

As per interest rate parity one year forward contract should be pric... View the full answer