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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