Lorelei Vincent

Business

14 March, 10:11

Suppose that the annual interest rate is 2.0 percent in the united states and 4 percent in germany, and that the spot exchange rate is $1.60/€ and the forward exchange rate, with one-year maturity, is $1.58/€. assume that an arbitrager can borrow up to $1,000,000 or €625,000. if an astute trader finds an arbitrage, what is the net cash flow in one year?

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