What arbitrage strategy can be used

Reference no: EM133290985

Case: In a free floating exchange rate regime, the demand and supply for a currency determine its price.

- Discuss how relative inflation rates may influence exchange rates

- Discuss how relative interest rates may influence exchange rates.

- What arbitrage strategy can be used if the following rates are observed in the market and what will be the risk free profit amount?

Reference no: EM133290985

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