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How much risk-free arbitrage profit could you make on 1

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Reference no: EM131145868

Suppose you observe the following 1-year interest rates, spot exchange rates and futures prices. Futures contracts are available on €10,000.

How much risk-free arbitrage profit could you make on 1 contract at maturity from this mispricing?

Current Spot rate ($/Euro) =1.4500

Current One year Forward Rate ($/Euro) =1.4800

U.S. Interest Rate=4%

Euro Interest Rate=3%

Reference no: EM131145868

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