Net Interest Margin Arbitrage is defined by the ability of capturing the spread between lending rates and saving rates. How to Arbitrage Interest Rates Margin Arbitrage Steps: 1. Save X amount of initial investment capital or principal. 2. Take a loan against those X saving as collateral. 3. Finally, lend out that same amount of money X back to your bank. Let’s by buying their preferred shares or bonds. There you have it, a secure and profitable way to conducted net interest margin arbitrage. Now let us create a practical example of this method...