Rates are compounded daily

Reference no: EM13338038

Suppose that the spot price of EUR is 1.4580USD for 1 euro. The three month forward rate is 1.4540 USD for 1euro. Let's say that the 3 month USD interest rate is 0.3% annualized and the three month Euro interest rate is 0.7% annualized (rates are compounded daily). Is there an arbitrage opportunity?

Reference no: EM13338038

Questions Cloud

A frictionless horizontal floor with a force : A 3 kg box is pushed across a frictionless horizontal floor with a force F = 20 N that makes an angle of 25° with the horizontal. The box moves 18 m.

What type of competitive action does this represent : The Grace L Ferguson Aircraft and Storm DoorCompany, a struggling manufacturer of small airplanes, sees amarket opportunity, and has decided to double its plant capacityover the next 2 years. What type of competitive action does thisrepresent?

What average force did the block exert on the bullet : What average force did the block exert on the bullet if it took 0.07 s to stop the bullet?

Develop an investment portfolio thatminimize risk : A Financial Institution carries an investment portfolio of avariety of stock, bonds and other investment alternative. Currently$200,000 of funds are available and mush be considered for newinvestment opportunities.

Rates are compounded daily : Suppose that the spot price of EUR is 1.4580USD for 1 euro. The three month forward rate is 1.4540 USD for 1euro. Let's say that the 3 month USD interest rate is 0.3% annualized and the three month Euro interest rate is 0.7% annualized

How the number of gallons in the open tank is changing over : Draw a diagram of the factory and determine the maximum rate at which the market can be served if all valves are set to maximum. Explain in words how the number of gallons in the open tank is changing over time and draw a graph of the situatio..

Compare with the maximum diameter of jupiter : Galileo's Telescopes were not of high quality by modern standards. He was able to see the moons of Jupiter but he never reported toseeing features on Mars. Use the small-angle formula to find themaximum angular diameter of mars when it is closest to ..

Cost drivers of set up and quality inspection : An electronic company makes two network boards A and B for thecomputer industry. Component board A is produced in branches of10000 units and board B in batches of 1000 units. Each has set upcosts of $250 and a quality inspectinon costs of $150

Difference between absobtion and marhinalcosting : Explain the difference between absobtion and marhinalcosting. calculate the marginal cost per drill. prepare a profit and loss statement for the years expectedproduction

User Account

All Pages