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What arbitrage profit results borrows the maximum funds

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Question - A currency dealer can borrow $1,180,000 (or the equivalent in euros) for one year. The one-year interest rate is 4.80% in the U.S. and 9.40% in the euro zone. The spot exchange rate is $1.2548/€1.00 and the one-year forward exchange rate is $1.2162/€1.00. What arbitrage profit results if the trader borrows the maximum available funds?

Reference no: EM132066530

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