How can he complete interest arbitrage, Business Economics

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How can he complete interest arbitrage

The answer to covered interest arbitrage

HJ, an abitrager with Bank of Montreal, faces the following CAD/USD prices;
Spot: CAD 1.49/USD
6M Forward: CAD 1.51/USD
6M CAD interest rate 7.5% per annum
6M USD interest rate 5.0% p.a.

H.J is authorized to use CAD20,000,000 or its USD equivalent. The ending profit, if any, should be realized in CAD. How can he complete interest arbitrage? What will be his profit?

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Business Economics: How can he complete interest arbitrage

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Business Economics: How can he complete interest arbitrage

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Recent Questions Asked Business Economics

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Request for Solution File

Ask an Expert for Answer!!

Business Economics: How can he complete interest arbitrage

Reference No:- TGS028738

Recent Questions Asked Business Economics

Q : What actions do you need to take to speculate in the market

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Q : Calculate the deducted amount

Q : Which of the instance of evolutionary change

Q : How can he complete interest arbitrage

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