Business, 01.11.2019 07:31 xojade

Suppose that the one-year interest rate is 5.0 percent in the united states and 3.5 percent in germany, and that the spot exchange rate is $1.12/€ and the one-year forward exchange rate, is $1.16/€. assume that an arbitrageur can borrow up to $1,000,000. if an astute trader finds an arbitrage, what is the net cash flow in one year? a. $10,690 b. $15,000 c. $46,207 d. $21,964.29

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