If there is no transaction fee is there any arbitrage


The current USD/HKD exchange rate is 7.60 HKD per USD. The six-month forward exchange rate is 7.85. The six-month HKD and USD interest rate is 1% and 3% per annum (annually compounded), respectively. If there is no transaction fee, is there any arbitrage opportunity? If yes, what are your strategies and possible profit?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: If there is no transaction fee is there any arbitrage
Reference No:- TGS02814923

Expected delivery within 24 Hours