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Assume three months later, the annual interest rate is 10% in Mexico and 1.5% in the US, the spot rate is $0.05 per peso and

Assume three months later, the annual interest rate is 10% in Mexico and 1.5% in the US, the spot rate is $0.05 per peso and the one year forward rate is $0.048 per peso. Is interest rate parity holds? If not, can your company take advantage of this arbitrage opportunity? How much is your profit if you have $1million?

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