Assume you notice the following information. Assume you spend $1 million USD do an arbitrage trading strategy.

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Assume you notice the following information. Assume you spend $1 million USD do an arbitrage trading strategy. What is your profit is USD. Remember to consider the profit after you pay back your loan

Spot (CAD/USD)=1.75
1 Year Forward (CAD/USD) = 1.65
1 Year Canadian interest rate of 3% in Canadian Dollars (CAD)
1 Year US interest rate of 4% in US Dollars (USD

The Canadian dollar:US dollar exchange rate was C$1.15/US$1. One year later, it moved to C$1.25/US$1. The Canadian dollar:

depreciated by 15%

depreciated by 8%

appreciated by 10%

appreciated by 8.7%

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Apr 04, 2024 12:56 PM

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Assume you notice the following information. Assume you spend $1 million USD do an arbitrage trading strategy.

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To calculate the profit from the arbitrage trading strategy we need to consider the interest rate di... View the full answer

Income Tax Fundamentals 2013

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