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As an experienced trader, you can trade based on the following data: 1. Spot rate: Spot USD/EUR = 1.250 1.25 2. Forward
Posted: Sun Jun 05, 2022 6:57 am
by answerhappygod
- As An Experienced Trader You Can Trade Based On The Following Data 1 Spot Rate Spot Usd Eur 1 250 1 25 2 Forward 1 (69.26 KiB) Viewed 45 times
As an experienced trader, you can trade based on the following data: 1. Spot rate: Spot USD/EUR = 1.250 1.25 2. Forward rate: Forward USD/EUR = 1.248 1.248 3. US I year deposit rate: r usd = 3% 3% 4. Eurozone I year deposit rate: r EUR = 3.15% 3.15% a) What is the return on 1 USD deposit? b) What is the return in USD on a dollar-covered Euro lending? c) Can the given information provide an arbitrage opportunity?