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You run a hedge fund with a line of credit that allows you to borrow $100...

You run a hedge fund with a line of credit that allows you to borrow $100 million at an annual interest rate of 5%. The minimum amount of time that you can borrow for is one day. There are 365 days in a year. The spot rate for a euro is $1.13. The spot rate for a yen is $0.0090. The spot rate between yen and euros is ¥130/€. Which currencies should you buy or sell to take advantage of arbitrage opportunities? How much money can you make in one round trip in one day if prices don’t change?

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