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You hold the current editions of The Wall Street Journal and The Financial Times, the British answer to the WSJ. In the WSJ, you see that the dollar/pound 90-day forward exchange rate is $2 per pound. In The Financial Times, the pound 90-day dollar/pound rate is .45 per U.S. dollar. Explain how you would trade to take advantage of these rates, assuming perfect markets.

Financial Management, Finance

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