A foreign exchange trader, authorized to trade $10,000 or its equivalent, faces the following quotes: Spot rate: $1, 5000/pound Six-month forward: $1, 5625/pound Six-month U.S. interest rate: 4.000% p.a. (2.000% per six-month) Six-month U.K. interest rate: 6.000% p.a. (3.000% per six-month) This trader decides to profit from the covered interest arbitrage (CIA) opportunity. What is her profit? $1041.67 $1444.75 $729.17 -$729.17 Use the following information to answer the next three questions: Brenda works at the currency trading unit of Wells Fargo Bank in El Paso, Texas. Her latest speculative position is to profit from her expectation that the euro will depreciate significantly against the U.S. dollar. The current spot rate is $1.2600/pound. She must choose from the following 90-day European options on the euro: Based on Brenda's expectation on euro, she should Buy a call on euro Buy a put on euro If the spot rate in 90 days is $1.1000/pound, her net profit is $0.105 $0.095 -$0.105 -$0.095 If the spot rate in 90 days is $1.38/pound, her net profit is $0.085 $0.075 -$0.015 -$0.055