Describe how you might earn a risk-free profit by engaging, Financial Management

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Describe how you might earn a risk-free profit by engaging

Japanese Yen currently trades at 122.1 yens per dollar. The US risk free rate is 4.5%, and the Japanese risk-free rate is 2%. Three-month forward contracts on the yen are quoted at 123 yens per dollar. Describe how you might earn a risk-free profit by engaging in a forward contact. What is the arbitrage profit?

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Financial Management: Describe how you might earn a risk-free profit by engaging

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