Question: Question 10 (2 Points) Arbitrage opportunities rarely arise. You work for Dynamic Arbitrage Inc. in the USA. The spot rate is 1.2$/E and one year

Question 10 (2 Points)

Arbitrage opportunities rarely arise. You work for Dynamic Arbitrage Inc. in the USA. The spot rate is 1.2$/E and one year forward rate is 1.3$/. Suppose that the current US interest rate is 9%. In Germany, the interest rate is 7%. You can borrow 200,000 $US from a bank in the USA. Given this information, the amount of money you can make without any risk is ___.

None of these
around $9,784
The question cannot be answered given the information
around $7,487
around $13,833

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