1. CIA

Assume the following interest rate and exchange rate quotes and you have $1,000,000 or its yen equivalent, to invest:

Spot exchange rate:102.60/$

180 day forward rate:101.80/$

180 day $ interest rate:1.60% p.a.

180 day interest rate:0.80% p.a.

.

Is covered interest arbitrage worthwhile? If yes, what is your strategy and how much is your profit (show the steps)? What market forces would occur to eliminate any further possibilities of covered interest arbitrage?

please show all the steps! Thank you!