If a 6 month T-bill in the U.S. has an interest rate of 4% and the 6 month forward premium on GBP/USD is 1.5% then what is the implied 6 month interest rate for Great Britain?

	A.	1%
	B.	-1%
	C.	1.5%
	D.	2.5%

Suppose that the U.S. interest rate on one year Treasury notes was 4.7%. We will use this as the annual interest rate in the U.S. And suppose that the interest rate on the one-year German Treasury note was 4.2%. The spot rate is 1.0162 EUR/USD.. And the 3-month forward rate is 1.0188 Eur/USD. Is there an opportunity for covered interest arbitrage?

If so, what would be the total profit if we borrowed $25 million?

	A.	YES- $27,395.21 would be the profit
	B.	YES- $33,385.41 would be the profit
	C.	YES- $37,342.89 would be the profit
	D.	NO- there is no opportunity for a profit

Suppose that the U.S. interest rate on one year Treasury notes was 4.1%. We will use this as the annual interest rate in the U.S. And suppose that the interest rate on the one-year German Treasury note was 2.25%. The spot rate is .9877 EUR/USD. And the 6-month forward rate is .9992 Eur/USD. Is there an opportunity for covered interest arbitrage?

If so, what would be the total profit if we borrowed $25 million?

	A.	YES- $51,665.34 would be the profit
	B.	YES- $53,385.41 would be the profit
	C.	YES- $63,104.94 would be the profit
	D.	NO- there is no opportunity for a profit