Covered Interest Arbitrage. The South African rand has a 1-year forward premium of 2 percent. Oneyear interest

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Covered Interest Arbitrage. The South African rand has a 1-year forward premium of 2 percent. Oneyear interest rates in the United States are 3 percentage points higher than in South Africa. Based on this information, is covered interest arbitrage possible for a U.S. investor if interest rate parity holds?

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