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How much can you get from a covered interest arbitrage

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As a trader, you see the following prices from two different banks:1-year euro deposits/loans rate: 6.0% 1-year Malaysian ringgit deposits/loans rate: 11%

Spot exchange rates: MYR 4.6602 / EUR - MYR 4.6622 / EUR

1-year forward exchange rates: MYR 4.9500 / EUR - MYR 4.9650 / EUR

Assuming you can borrow 100000 ringgits, how much can you get from a covered interest arbitrage?

Reference no: EM132999421

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