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Assume the following information: Spot rate of Mexican peso = $0.1 180day forward rate of Mexican peso = $0.098 180day Mexican interest rate = 6%

Assume the following information:

Spot rate of Mexican peso = $0.1

180day forward rate of Mexican peso = $0.098

180day Mexican interest rate = 6%

180day U.S. interest rate = 5%

Given this information, is covered interest arbitrage worthwhile for Mexican investors who have pesos to invest? Assume you have MXP1,000,000 as your initial investment. Explain your solution.

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