QUESTION 1 You have $1,000,000 to invest (that is you don't need to borrow money) Current spot rate of pound = $130 90-day forward rate of pound - $1.28 3-month deposit rate in the US -3% 3-month deposit rate in Great Britain - 4% If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days? (1+Rh) - (1+Rf)*Fle A. $1,030,000. B. $1,040,000 C. $1,034,000 D. $1,024,000. You have $900,000 to invest that means you don't need to borrow money) Current spot rate of Australian dollar (A$) $.62 180-day forward rate of the Australian dollar $.64 180-day interest rate in the United States 3.5% 180-day interest rate in Australia 3.0% If you conduct coverad interest arbitrage, what is the dollar profit you will have realized after 180 days? (1+Rh) - (1 +Rf)*Fle A. $56,903 B. $27,000 C. $61,548 D. $31,500