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Suppose that the annual interest rate is 50 percent in the

Suppose that the annual interest rate is 5.0 percent in the United States and 3.5 percent in Germany, and that the spot exchange rate is $1.12/€ and the forward exchange rate, with one-year maturity, is $1.16/€. Assume that an arbitrager can borrow up to $1,000,000. If an astute trader =nds an arbitrage, what is the net cash >ow in one year? 21,964.29 please show work

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Finance Basics: Suppose that the annual interest rate is 50 percent in the

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