1.) Covered Interest Arbitrage: Assume the following information:

Spot rate of Mexican peso	$.100
180-day forward rate of Mexican peso	$.098
180-day Mexican interest rate	6%
180-day U.S. interest rate	5%

Given this information, is covered interest arbitrage worthwhile for Mexican investors who have pesos to invest? Explain your answer.

2.) Interest Rate Party: Explain the concept of interest rate parity. Provide the rationale for its possible existence.