Assume the following information You have $1,000,000 to invest: Current spot rate of pound = $1.25 90-day forward rate of pound = $1.23 3-month deposit rate in U S = 2% 3-month deposit rate in Great Britain = 4% If you use covered interest arbitrage for a 90-day investment, what will be the amount of U. S. dollars you will have after 90 days? $1, 120,000 $1, 023, 360 $1, 040,000 $1, 034,000 Assume that interest rate parity holds, and the US interest rate is 3% while the UK interest rate is Then the US interest rate increases to 5% while the UK interest rate remains the same. As a result the increase in the US interest rate, the pound's forward will in order to maintain interest rate parity. discount decrease discount; increase premium; decrease premium; increase Assume that a U.S. firm can invest funds for one year in the U. S. at 3% or invest funds in 5%. The spot rate of the peso is $. 10 while the one-year forward rate of the peso is $.10. If U. S attempt to use covered interest arbitrage, what forces should occur? spot rate of peso decreases; forward rate of peso increases. spot rate of peso decreases; forward rate of peso increases. spot rate of peso increases; forward rate of peso increase spot rate of peso increases; forward rate of peso decreases. Assume that Euro are benefiting from covered interest arbitrage due to a high rate. Which of the following forces from the act of this covered interest arbitrage? upward pressure on the euro's spot rate. downward pressure on the Euro interest rate. upward pressure on the euro's forward rate. upward pressure on the U.S. interest rate