5. Assume the following hypothetical info

Canadian dollar (CAD) spot 0.46

30-day CAD interest rate 0.54%

30-day UK pound interest rate 0.45%

30-day CAD 0.43

There are no bid-ask spreads and different lending/borrowing rates, given these numbers, what would be the yield (% return) to a UK investor who tried a carry trade arbitrage by investing a million British pounds (1 000 000) in Canada. What would be the yield for a Canadian investor in the UK ? What market forces will eliminate future chances? Make sure you use annualized terms (interest rates are quoted always in annual terms!!) and the right decimals

Make sure you use annualized terms (interest rates are quoted always in annual terms!!) and the right decimals.