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QUESTION
The following interest rate and exchange rates are listed in London:00% REUR:00%-3.4% Spot Rate: EUR/USD 1.2280-1.2295 Forward Rate (1 Year) :...
The following interest rate and exchange rates are listed in London:RUS: 4.6%-5.00%REUR: 3.00%-3.4%Spot Rate: EUR/USD 1.2280-1.2295Forward Rate (1 Year) : EUR/USD 1.2390-1.241010,000,000 EUR or USD 12,280,000 credit line to execute arbitrage. Can you generate covered interest arbitrage profits? What would be your profit?
