Forex and Interest Rate Illustration 6


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Forex and Interest Rate Illustration 6

Exchange Rates:

CHF 1.3829 per $ (Spot)

CHF 1.3849 per $ (3 months)

Interest Rates:

$ 4 per cent per annum

CHF 5 per cent per annum

Workout the arbitrage possibilities.

(Ans.: Formula I – Negative. Formula II- Positive, 1038 foreign currency/$1,038 Gain on million)

 


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