QUESTION 51 Assume that a U.S. fincan invest funds for one year in the U.S. at 12% or invest funds in Mexico at 14%. The spot rate of the peso is 5.10 while the one-year forward rate of the peso is 5.10. U.S. firms attempt to use covered interest arbitrage, what forces should occur? (a) Does interest arbitrage hold? Is covered interest arbitrage possible? (be brief (b) Suppone a typical US investor has $1 million, and a typical Mexican investor has 1 million pesos available for arbitrage transactions. If in arbitrage opportunity is possible, decide which investor it favors, and the amount of arbitrage profits that can be gained TT T Arial 3 (12pt)