Question: 22 3. The spot exchange rate between the US dollar and the Japanese yen is 104.73/$ and the 3-month forward rate is 103.98/$. If the

3. The spot exchange rate between the US dollar and the Japanese yen is 104.73/$ and the 3-month forward rate is 103.98/$. If the annual interest rates in the US and Japan are 1.50% and 0.50%, respectively. How would you arbitrage if you could borrow either $1,000,000 or 100,000,000? Calculate your arbitrage profit in dollars

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