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Covered Interest Arbitrage. Assume the following information: Spot rate of Mexican peso = $.100 180day forward rate of Mexican peso = $0.098 180day Mexican interest

Covered Interest Arbitrage. Assume the following information:

Spot rate of Mexican peso = $.100
180day forward rate of Mexican peso = $0.098
180day Mexican interest rate 0.06
180day U.S. interest rate 0.050

Suppose an initial investment of 1,025,000 pesos. Given this information, Mexican Investors would generate a yield of ???

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