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Interest rates 2% lower in the U.S. than in the foreign country. The foreign currency exhibits a 3% forward discount. Who has a covered interest arbitrage opportunity?

-Foreign investors investing in the U.S.

-Foreign investors investing in their own country

-U.S. investors investing in the U.S.

-No one, since the forward discount exceeds the interest rate differential

-U.S. investors investing in the foreign country

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92320294

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