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Assume the following information Current spot rate of Mexican peso = $.05 Forecasted spot rate of Mexican peso 1 year from now = $.051 One-year

Assume the following information

Current spot rate of Mexican peso = $.05

Forecasted spot rate of Mexican peso 1 year from now = $.051

One-year forward rate of the Mexican peso = $.052

Annual interest rate on Mexico = 8%

Annual interest rate on U.S. dollars = 6%

Given the information in this question, what would be the return from covered interest arbitrage by U.S. investors with $500,000 to invest?

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