Refer to the previous question.If you conduct covered interest arbitrage,what is your percentage return after 180 days Is covered interest arbitrage feasible in this situation
A) 7.96%;feasible
B) 6.04%;feasible
C) 6.04%;not feasible
D) 4.07%;not feasible
E) 10.00%;feasible

Question

Quizplus · Accepted Answer

Covered interest arbitrage is feasible if the return from arbitrage is higher than the domestic interest rate. A return of 6.04% indicates that the arbitrage is feasible if it exceeds the domestic rate.

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