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Problem 4 Intro The annual risk-free interest rate is 8% in the US and 7% in Mexico. The spot rate is $0.051 per peso and

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Problem 4 Intro The annual risk-free interest rate is 8% in the US and 7% in Mexico. The spot rate is $0.051 per peso and the one-year forward rate is $0.052 per peso Part 1 - Attempt 1/5 for 10 pts. Who can profit from covered interest arbitrage, and how? Ignore taxes and transaction costs No one can profit from covered interest arbitrage O U.S. investors can profit by selling pesos in the forward market O Mexican investors can profit by buying dollars in the forward market. O U.S. investors can profit by buying pesos in the forward market Mexican investors can profit by selling dollars in the forward market. Submit

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