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 rate is i() = 5%. The spot exchange rate is $1.25 = 1.00 and the one-year forward exchange rate is $1.20 = 1.00. Show how to realize profit via covered interest arbitrage. Hint: You can borrow and invest in U.S. or you can borrow U$ and invest in Euro zone. You must use the IRP equation to decide where to invest.