only do 17

Exhibit 7-1. Assume the following information: You have $300,000 to invest: The spot bid quote for the euro () is $1.08 The spot ask quote for the euro is $1.10 The 180-day forward rate (bid) of the euro is $1.08 The 180-day forward rate (ask) of the euro is $1.10 The 180-day interest rate in the United States is 6% The 180-day interest rate in Europe is 8% 16. Refer to Exhibit 7-1 above. If you conduct covered interest arbitrage, what amount will you have after 180 days? 17. Refer to Exhibit 7-1 above. If you conduct covered interest arbitrage, what is your percentage return after 180 days? Is covered interest arbitrage feasible in this situation