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Bill Stearn, a currency trader of multibillion-dollar hedge fund, Axe Capital based in New York, is tasked to make some arbitrage profits from interest rate differentials on the Norwegian krone (NOK) and the US dollar (USD). He observes the following market rates and wonders whether he can make some arbitrage profits in the coming 90 days. Exhibit 5: Market Data Arbitrage funds available USD 30,000,000 Spot exchange rate (NOK/USD) 6.0312 90-day forward contract rate (NOK/USD) 6.0186 90-day USD interest rate (annualized) 5.00% 90-day NOK interest rate (annualized) 4.45% (2A) Calculate the equilibrium forward rate of NOK/USD based on interest rate parity. [3 marks] (2B) From your answer to question (2A), explain how Bill can execute a covered interest arbitrage trade (no calculations necessary). [2 marks] (2C) Calculate the potential profits of the suggested trade from question (2B). [15 marks]