Covered Interest Arbitrage Illustration 1
Consider the following and calculate the arbitrage gain possible:
€ 1.4528/£ Spot € 1.4538/£ 3 months forward
Interest Rates € 2.15% per annum. £ 4.9% per annum.
(Ans.: Borrow €, gain 7,572 € per million)
Covered Interest Arbitrage Illustration 1
Consider the following and calculate the arbitrage gain possible:
€ 1.4528/£ Spot € 1.4538/£ 3 months forward
Interest Rates € 2.15% per annum. £ 4.9% per annum.
(Ans.: Borrow €, gain 7,572 € per million)
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