A-The spot rate between the Mexican peso (MXN)and the US Dollar(USD)in New York is MXN 20.8741/USD and the 6-month futures rate is MXN 20.9944/USD. If US interest rates are 5% per annum, what is the annual interest rate in Mexico?

b-Assume the following information:

You have $1,000,000 to invest

Current spot rate of pound=$1.30

90day forward rate of pound =$1.28

3month deposit rate in U.S. =3%

3month deposit rate in Great Britain =4%

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