7 VERtoruso Assume the following information: Current spot rate of New Zealand dollar NZD One-year forward rate of the New Zealand dollar Annual interest rate on New Zealand dollars Annual interest rate on U.S. dollars Recive 16&INZD 17 = $.615 = $.625 2.3% 2.8% a) Given the information in this question, the additional profit from covered interest arbitrage by U.S. Investors with $100,000 to invest is equal to b) Would Covered interest Arbitrage work for a New Zealand investor with 100,000 NZD to invest? 4) Assume the following information: Current spot rate of MXP = $0.10 One-year forward rate of the MXP = $0.098 Annual interest rate on MXP 6% Annual interest rate on U.S. dollars 4.8% a) Given the information in this question, the additional profit from covered interest arbitrage by a Mexican Investor with 100,000 MXP to invest. Pesos b) Would covered interest arbitrage work for a US investor with $100,000 to invest