$7.$ A foreign exchange trader obtains the following information for the Swiss franc $($CHF$)$ and the USD:

Spot exchange rate $($CHF$/$USD$)1\mathrm{.}1500$

Three$-$month forward exchange rate $($CHF$/$USD$)1\mathrm{.}1100$

Three$-$month interest rate in the United States $4\mathrm{.}0\%$ per annum

Three$-$month interest rate in Switzerland $3\mathrm{.}0\%$ per annum

$($i$)$ Does Covered Interest Parity $($CIP$)$ hold?

$($ii$)$ If CIP does not hold, clearly outline the steps the trader would follow in order to make arbitrage profits in this situation.

$($iii$)$ Suppose the trader has access to USD $1,000,000($or equivalent$)$ for arbitrage purposes. How much profit can the trader make if he follows the steps in $($ii$)?$

$($iv$)$ How do the spot exchange rate, forward exchange rate, interest rate in the United States and interest rate in Switzerland as mentioned above change as a result of arbitrage?