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Business, 21.02.2020 05:10 deveshtewariri8584

A bank can borrow or lend at LIBOR. Suppose that the six-month rate is 4% and the nine-month rate is 5%. The rate that can be locked in for the period between six months and nine months using an FRA is 6.5%. What arbitrage opportunities are open to the bank?

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A bank can borrow or lend at LIBOR. Suppose that the six-month rate is 4% and the nine-month rate is...
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