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Suppose the spot rate is Yen 90/$, the three-month forward rate Yen 88/$ and the three-month yen interest rate 2.5%. What is the implied three-month

Suppose the spot rate is Yen 90/$, the three-month forward rate Yen 88/$ and the three-month yen interest rate 2.5%. 


What is the implied three-month US$ interest rate?






Suppose the actual three-month US$ interest rate is 10%. What would you do to profit from the arbitrage opportunity?

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