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What would be the profit for an arbitrager

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Reference no: EM132512795

Spot Rate - 64.687 INR/$

Forward Rate - 67.848 INR/$

Interest Rate in US - 1.5%

Interest Rate in India - 6.75%

  • India being the home country and US being the foreign country.

Question 1: Assuming that the borrowing and the lending rate is equal, if there is an arbitrage opportunity, what would be the profit for an arbitrager taking advantage of this situation based on $1,000,000 Investment. The time frame is 1 year.

Select one:

Option a. $2765

Option b. $1889.6

Option c. $967.96

Option d. $1017.8

Reference no: EM132512795

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