Which currencies should you buy or sell to take advantage


You run a hedge fund with a line of credit that allows you to borrow $100 million at an annual interest rate of 5%. The spot rate for a euro is $1.18. The spot rate for a yen is $0.0090. The spot rate between yen and euros is ¥130/€. Which currencies should you buy or sell to take advantage of arbitrage opportunities? How much money can you make in one roundtrip in one day if prices don’t change?

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Financial Management: Which currencies should you buy or sell to take advantage
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