Consider the following prices in the international money markets:

Spot rate for = $1.0800-25

90-day Forward rate for = $1.0000-15

Interest rate in Europe (r) = Deposits= 4%, Borrowing = 5% per year (all rates are APR)

Interest rate in U.S. (r$) = Deposits= 1%, Borrowing = 2% per year (all rates are APR)

Assuming you don't have money but can borrow one million units of either currency, how can you profit in the above situation? Describe the flows and show all calculations. (Please do not round numbers -- use 6 decimals)