AuthorTopic: Uncovered Interest Arbitrage
REITboy
@2014-07-17 10:47:51		 I just have a tough time wrapping my brain around these questions... are there any rules for getting these problems done?

In particular, assuming arb is possible, is it true that one should:

1)borrow the currency with the lowest interest rate, then

2)lend in the higher-rate currency,then

3)convert back at the more attractive of the calculated or forward contract rates?

Thanks!
-G

CFA Discussion Topic: Uncovered Interest Arbitrage

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Your review questions and global ranking system were so helpful.
Lina

Lina