Given the information:

Based on your recommended investment strategy your covered interest arbitrage profit should be:

USD $200,000$

CAD $52,340$

USD $42,500$

CAD $250,000$

Question $21$

Given the information:

Which of the following should result from covered interest arbitrage?

Downward pressure on the Canadian interest rate.

Upward pressure on the U$.$S$.$ interest rate.

Downward pressure on the CAD's forward rate.

Downward pressure on the CAD's spot rate.