Covered interest arbitrage in the us


Problem: Assume the current spot rate is C$1.2103 and the one year forward rate is C$1.1952. The nominal rish free rate in Canada is 3% while it is 4 % in the US. Using covered interest arbitrage you can earn an extra ____________profit over that which you would earn if you invested $1. in the US

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Finance Basics: Covered interest arbitrage in the us
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