Current location - Loan Platform Complete Network - Bank loan - If the annual interest rate of a foreign currency center is 4 percentage points higher than that of the home country, and the forward discount rate of this foreign currency is 2% per year. An arbitrag
If the annual interest rate of a foreign currency center is 4 percentage points higher than that of the home country, and the forward discount rate of this foreign currency is 2% per year. An arbitrag
If the annual interest rate of a foreign currency center is 4 percentage points higher than that of the home country, and the forward discount rate of this foreign currency is 2% per year. An arbitrageur sells and covers arbitrage

The interest rate difference is 4, which means that arbitrage can obtain an annual return of 4, and the discount rate of a currency with a high interest rate is 2, which means that if you choose a currency with a high interest rate to invest, you will lose 2 years. In this way, arbitrageurs Through covering arbitrage, you can earn a net profit of 2 years, and you can make a profit of 1 year by buying foreign treasury bills with a 6-month period.