What arbitrage opportunity does this create

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Reference no: EM131448312

3-month LIBOR rates for Euro and USD are 4.75% and 5.70%, respectively, with continuous compounding. The current exchange rate between Euro and USD is 1.41 USD/EUR. The 3-month forward price for Euro quoted by a bank is 1.40 USD/EUR. What arbitrage opportunity does this create?

Reference no: EM131448312

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