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Assume the spot rate is $1.50/. The annualized 4-month interest rate is 7.5% in US and 5.1% in the UK. 4-month forward rate is quoting

Assume the spot rate is $1.50/. The annualized 4-month interest rate is 7.5% in US and 5.1% in the UK. 4-month forward rate is quoting 1.48 US dollar for each pound. You can borrow as much as $1,500,000 or 1,000,000. Determine the arbitrage profit.

		21851
		1017000
		1537500
		15098

please give solutions

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