Question: u u u 5. COnsider the following information: - rug = 6%, Up = 3% 0 E0 = 90 Yen per Dollar 0 F0 =

u u u 5. COnsider the following information: - rug =

u u u 5. COnsider the following information: - rug = 6%, Up = 3% 0 E0 = 90 Yen per Dollar 0 F0 = 103 Yen per Dollar where the interest rates are annual yields on US or Japanese bills and the futures contract is for 1-year delivery. (a) Where would you lend? (b) Where would you borrow? (c) How could you arbitrage

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