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Suppose you are given the following information: Ft($/)(3 month; 90 days) = $0.0098 St($/) =...

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Accounting

Suppose you are given the following information:

Ft($/)(3 month; 90 days) = $0.0098 St($/) = $0.0095 it =0.04 (the annualized 3 month T-bill rate in the U.S.) it*=0.03 (the annualized 3 month T-bill rate in Japan)

Is there a covered interest arbitrage opportunity? Explain.

Check: (1+i )

Compare: (1+i ^*)F/S

Answer & Explanation Solved by verified expert
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