Question: 1. Using the following information, answer the next two questions. spot CAD US Deposit Rate 4.50% 0.25% Borrowing Rate 6.50% 1.75% You have borrowing capacity

1. Using the following information, answer the next two questions.

	spot
	CAD	US
Deposit Rate	4.50%	0.25%
Borrowing Rate	6.50%	1.75%

You have borrowing capacity of 1 million in each currency. What is the arbitrage profit? Use your local currencyThe local currency is USD because you can only make profit from the US side. I need to borrow from the US Bank to make the CIA work. The profit is in USD.

True

False

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