nterest rate in the US is 5% p. a. and the interest rate in Mexico is 40% p. a. The spot exchange rate is 6.50 (pesos per dollar). One year ahead forward rate is 7.00 (pesos per dollar). What is the profit made if an investor borrows $100, converts to pesos and invests in Mexico for a year? The forward rate is used for conversion back to the dollar.

		$20
		$25
		$30
		$35