What profit can you lock in without any risk

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Question - You notice the 6-month (ie 183 day) interest rate in the UK is 1.45%pa (ie 0.7270% for 183 days), whilst the interest rate in Australia is 0.25%pa for the same period. You also note that the GBP/AUD is 1.7829 and that the 6-month forward rate is 1.7800. Both countries use 365 day count convention. What profit, to two decimal places, can you lock in without any risk if you borrow 1m in the appropriate currency?

Reference no: EM132850665

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