2015 PM Q24, I can generate higher profit

The solution converts EUR to USD and then to DRN and invests in the DRN Libor at 2.1%. When they return it back eventually to EUR and netting out the 0.8% EUR borrowing costs, it results in a profit of $1,065.

However, I can generate higher profit by converting EUR to USD and then investing it at the 0.9% USD Libor rate. Conerting it back would gives me a $1,731 profit which is higher however it isn’t one of the choices.

I think i’m Losing it

I’m not sure it’s asking you to find the highest arbitrage opportunity, it’s asking you to partake in a Carry Trade which is borrow at lowest rate and invest at highest. I think that’s what you’re supposed to do