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Equinor's Corporate Arbitrage. Equinor, the national oil company of Norway, is a large, sophisticated, and active participant in both the currency and petrochemical markets Although it is a Norwegian company, because it operates within the global oil market, it considers the US dollar, rather than the Norwegian krone (Nok), as its functional currency. Ari Karlsen is a currency trader Equinor and has immediate use of either $3.1 million (or the Norwegian krone equivalent). He is faced with the following market rates, and wonders whether he can make some arbitrage prof in the coming 90 days. The CIA profit potential is%, which tells Ari Karlsen he should borrow and invest in the yielding currency, the 90 days, and therefore eam covered interest arbitrage (CIA) profits. (Round to four decimal places and select from the drop-down menus) The CIA profit amount is $(Round to the nearest cent) Data table (Click on the following icon in order to copy its contents into a spreadsheet) Arbitrage funds available Spot exchange rate (Nok-$1.00) 3-month forward rate (Nok-$1.00) US dollar 3-month interest rate Norwegian krone 3-month interest rate $3,100,000 60315 60182 4.997% 4.455% X selling the dollars forward

Equinor's Corporate Arbitrage. Equinor, the national oil company of Norway, is a large, sophisticated, and active participant in both the currency and petrochemical markets Although it is a Norwegian company, because it operates within the global oil market, it considers the US dollar, rather than the Norwegian krone (Nok), as its functional currency. Ari Karlsen is a currency trader Equinor and has immediate use of either $3.1 million (or the Norwegian krone equivalent). He is faced with the following market rates, and wonders whether he can make some arbitrage prof in the coming 90 days. The CIA profit potential is%, which tells Ari Karlsen he should borrow and invest in the yielding currency, the 90 days, and therefore eam covered interest arbitrage (CIA) profits. (Round to four decimal places and select from the drop-down menus) The CIA profit amount is $(Round to the nearest cent) Data table (Click on the following icon in order to copy its contents into a spreadsheet) Arbitrage funds available Spot exchange rate (Nok-$1.00) 3-month forward rate (Nok-$1.00) US dollar 3-month interest rate Norwegian krone 3-month interest rate $3,100,000 60315 60182 4.997% 4.455% X selling the dollars forward

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Equinor's Corporate Arbitrage. Equinor, the national oil company of Norway, is a large, sophisticated, and active participant in both the currency and petrochemical markets. Although it is a Norwegian company, because it operates within the global oil market, it considers the US dollar, rather than the Norwegian krone (Nok), as its functional currency. Ari Karisen is a currency trader for Equinor and has immediate use of either $3.1 million (or the Norwegian krone equivalent). He is faced with the following market rates, and wonders whether he can make some arbitrage profits in the coming 90 days. The CIA profit potential is%, which tells Ari Karlsen he should borrow and invest in the yielding currency, the 90 days, and therefore earn covered interest arbitrage (CIA) profits (Round to four decimal places and select from the drop-down menus) The CIA profit amount is $(Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet) Arbitrage funds available $3,100,000 60315 6.0182 Spot exchange rate (Nok-$1.00) 3-month forward rate (Nok=$1.00) US dollar 3-month interest rate Norwegian krone 3-month interest rate 4.997% 4.455% X selling the dollars forward
Transcribed Image Text:Equinor's Corporate Arbitrage. Equinor, the national oil company of Norway, is a large, sophisticated, and active participant in both the currency and petrochemical markets. Although it is a Norwegian company, because it operates within the global oil market, it considers the US dollar, rather than the Norwegian krone (Nok), as its functional currency. Ari Karisen is a currency trader for Equinor and has immediate use of either $3.1 million (or the Norwegian krone equivalent). He is faced with the following market rates, and wonders whether he can make some arbitrage profits in the coming 90 days. The CIA profit potential is%, which tells Ari Karlsen he should borrow and invest in the yielding currency, the 90 days, and therefore earn covered interest arbitrage (CIA) profits (Round to four decimal places and select from the drop-down menus) The CIA profit amount is $(Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet) Arbitrage funds available $3,100,000 60315 6.0182 Spot exchange rate (Nok-$1.00) 3-month forward rate (Nok=$1.00) US dollar 3-month interest rate Norwegian krone 3-month interest rate 4.997% 4.455% X selling the dollars forward
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