Determining the international business

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Reference no: EM131402492

International business.

Assume that you have the following information:

Spot Rate: 16.5292 Yen/Yuan

OneYear Forward Exchange Rate: 15.1418 Yen/Yuan

One Year Yen Interest Rate: 2.85%

OneYear Yuan Interest Rate: 2.58%

Is covered interest arbitrage worthwhile? If so, calculate the profit after one year assuming that you have 500,000 Yuan.

Reference no: EM131402492

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