What is the most likely reason why you could not get rich

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Reference no: EM131243325

On September 30, 2007, the following were the prices for the Euro FX Contract: Month

The 3-month U.S. Treasury offered a yield of 3.64% and the 6-month offered 3.91%. The price of USD to EUR was 0.7006=C. The yield on the 3-month German federal security was 3.88%.

(a) What was the spot rate?

(b) If there are no market imperfections, was there an arbitrage opportunity here? If so, how would you have exploited it?

Reference no: EM131243325

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