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  3. you see the following quotes: st = c$1.2125/$, ft+

You see the following quotes: St = C$1.2125/$, Ft+6 = C$1.2100/$, iC$ = 4%, and...

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Finance

You see the following quotes: St = C$1.2125/$, Ft+6 = C$1.2100/$, iC$ = 4%, and i$ = 3%.

(a) Do these rates offer covered interest arbitrage opportunity?

(b) If yes, which way the arbitrage capital move? Calculate the arbitrage profit.

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