Question: The spot rate is ( $ 0.51 / C A D 1 ). Platinum Bank undertakes arbitrage transactions in CAD using a sum of (

$The spot rate is \\( \\$ 0.51 / C A D$

The spot rate is \$ \\$ 0.51 / C A D 1 \$. Platinum Bank undertakes arbitrage transactions in CAD using a sum of \$ \\$ 100 \$ million. Annual interest rates are 9.8 per cent in Australia and 5.8 per cent in Canada. The bank can borrow or lend at these rates. What is the expected spread, if the forward rate is \$ \\$ 0.55 / C A D 1 \$ ? a. \2.5788 b. \4.2980 c. None of the options is correct d. \3.6533 e. \5.5875

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