Please answer the following questions and show work. Thank you.

1.Assume the bid rate of a Swiss franc is $.57 while the ask rate is $.579 at Regal Bank. Assume the bid rate of the Swiss franc is $.560 while the ask rate is $0.567 at Fremont Bank. Given this information, what would be your gain if you use $1,300,000 and execute locational arbitrage? That is, how much will you end up with over and above the $1,300,000 you started with?

2.Assume the following information

Spot rate today of Swiss franc =$0.60

1-year forward rate as of today for Swiss franc =$0.67

Expected spot rate 1 year from now =$0.64

Rate on 1year deposits denominated in Swiss francs =.07

Rate on 1year deposits denominated in U.S. dollars =.09

From the perspective of U.S. investors with $1,200,000, covered interest arbitrage would yield a rate of return of ?

3.A US firm has Euro receivables of E100,275,000 from Germany in six months. It decides to use options to hedge the receivables. Put options with exercise price $1.70 and premium $0.04 are available.

Suppose the firm fully hedges it's receivables (that is a fall in the value of euro below the strike price will not reduce the net cash flow to the firm).

The spot rate in six months is E1 for $1.40. What will be the net amount the firm will receive from the put options (put payoff minus premium)?