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Is covered interest arbitrage worthwhile

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Reference no: EM132465398

You can trade at the following prices: 

  • Spot rateMXN10/$
  • 6-month forward rateMXN11/$
  • 6-month Mexican interest rate18%
  • 6-month Canadian interest rate6%

Is covered interest arbitrage worthwhile? If so, explain the steps and compute the profit.

Reference no: EM132465398

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