Assume the following information:

You have $1,000,000 to invest

Current spot rate of pound= $1.30/bp

90 day forward rate for pound in the Forward market=$1.42/bp

3 month deposit rate in US = 6% annual

3 month deposit rate in UK = 4% annual

If you use covered interest arbitrage for a 90 day investment, what will be the amount of US you will have after 90 days?

1. Around $1,198,879.34
2. Around $1,040,021.65
3. Around $1,103,230.78
4. Around $1,034,000.33