ive typing answer with explanation and conclusion b) Mary recognises that an arbitrage opportunity exists and decides to borrow $1 million US dollars to purchase Japanese yen and sell 3-month forward to pay off US dollars denominated loan. Calculate the yen arbitrage profit from her strategy, using the data below and Japanese yen as the local currency. Show your calculations. [Hint: the strategy is for 3 months only]. Japanese Yen/US Dollar - spot currency exchange rate ¥124.30000/$1.00000 Japanese interest rate 0.50% US interest rate 3.50% Currency forward rate ¥123.26050/$1.00000

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Give typing answer with explanation and conclusion b) Mary recognises that an arbitrage opportunity exists and decides to borrow $1 million US dollars to purchase Japanese yen and sell 3-month forward to pay off US dollars denominated loan. Calculate the yen arbitrage profit from her strategy, using the data below and Japanese yen as the local currency. Show your calculations. [Hint: the strategy is for 3 months only]. Japanese Yen/US Dollar - spot currency exchange rate ¥124.30000/$1.00000 Japanese interest rate 0.50% US interest rate 3.50% Currency forward rate ¥123.26050/$1.00000
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