How much profit can you earn for the year on a loan of 1500


Assume the spot rate between the UK and the U.S. is £.6789 = $1, while the one-year forward rate is £.6782 = $1. The risk-free rate in the UK is 3.1 percent. The risk-free rate in the U.S. is 2.9 percent. How much profit can you earn for the year on a loan of $1,500 by utilizing covered interest arbitrage?

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Financial Management: How much profit can you earn for the year on a loan of 1500
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