1 pts Question 11 A currency dealer has good credit and can borrow either $1,000,000 or 800,000 for one year. The one-year interest rate in the U.S. is i$ -2% and in the euro zone the one year interest ratesie 6%. The spot exchange rate is $1.25 - 1.00 and the one-year forward exchange rate is $120 - 1.00, Show how to realize a certain profit via covered interest arbitrage. Borrow 800,000 at i-6%; translate to dollars at the spot, invest in the US. *-7% for one year, translate $1,020,000 back into euro at the forward rate of $1.20 - 100. Met profite2.000 O Borrow $1,000,000 at 2%. Trade $1,000,000 for 850,000, investatie -6% translate proceeds back forward rate of $1.20 - 1.00. Net profit - $61,200. O None of these Borrow 800,000 at i - 6%; translate to dollars at the spot invest in the U.S. $ - 25 for one year, translate $1,020,000 back into euro at the forward rate of $1.20 - 1.00. Neprofit $2000