2024 – Suppose that the current spot exchange rate is 6 25 Swedish Krona per

CURRENT SPOT EXCHANGE RATE 1584 – 2024

Suppose that the current spot exchange rate is 6.25 Swedish Krona per $ and the three-month forward exchange rate is 6.28 SEK per $. The three-month interest rate is 5.6% per annum in the U.S. and 8.8% per annum in Sweden. Assume that you can borrow up USto $1,000,000 or SEK 6,250,000. Can you generate arbitrage profits? Show your profits both in USD and SEK terms.$4,250SEK 4,250USD 3,118SEK 3,118

2024 – Suppose that the current spot exchange rate is 6 25 Swedish Krona per.

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