Assume that you can borrow up USto $1,000,000 or SEK 6,250,000. Can you generate arbitrage profits?

No, you cannot generate arbitrage profits. Arbitrage is a trading method used to take advantage of differences in prices for the same asset in different markets. In this case, the difference between the spot rate and the forward rate is not enough to generate an arbitrage opportunity.

The interest rate differential (3.2%) between U.S and Sweden is also too small to create an arbitrage opportunity since it would only amount to $32,000 on a $1 million loan if left untouched for three months. This amount would be insufficient to cover transaction costs associated with currency conversion or trading of securities including delays in transfers or trade settlement which are likely much higher than this profit potential.

Moreover, one should also consider potential exchange rate fluctuations over the next three months that can render any arbitrage opportunity useless as they may reduce or eliminate any initial profits generated from taking advantage of spot and forward rates mismatch at initiation of a trade.

Therefore, given these conditions one cannot expect to generate meaningful profits through arbitrage with such capital amounts within three-month time frame without substantial risks associated with exchange rate volatility or other transaction costs mentioned above.