Interest rate in US (Rh):	7%
Interest rate in Canada (Rh)	5%
Line of credit in US	USD 10,000,000
Line of credit in Canada	CAD 12,500,000
The spot rate for CAD (S0):	$.80
1-year forward rate for CAD (FR):	$.82

1.) What is your covered rate of return from US (Rch)?

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

3.) What is your covered rate of return from US (Rch)?

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