Calculate the Profit in dollars as well as the Rate of Return for 180 days, given the following information with a covered interest arbitrage.

Is covered interest arbitrage possible in this situation?

The spot ask quote for the euro is $1.12 and The spot bid quote for the euro () is $1.10

The 180-day forward rate (ask) of the euro is $1.12 and The 180-day forward rate (bid) of the euro is $1.10

The 180-day interest rate in Europe is 7% and The 180-day interest rate in the United States is 5%

You have $500,000 to invest:

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