Question: Heidi Hi Jensen is again evaluating the arbitrage profit potential in the same market after another change in interest rates. (Remember that any time the

Heidi Høi Jensen is again evaluating the arbitrage profit potential in the same market after another change in interest rates. (Remember that any time the difference in interest rates does not exactly equal the forward premium, it must be possible to make a CIA profit one way or another.)

Arbitrage funds available......................$5,000,000

Spot exchange rate (kr/$)...........................6.1720

3-month forward rate (kr/$)........................6.1980

U.S. dollar 3-month interest rate..................3.000%

Danish kroner 3-month interest rate..............6.000%

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