QUESTION Lionel Sanchez, a foreign exchange trader at ABN AMRO (the Netherlands) is exploring covered interest arbitrage possibilities. He wants to invest 10,000,000 or its Mexican peso (MXN) equivalent in a covered interest arbitrage between MIN and the euro. He faced the following exchange rate and interest rate quotes Abitrage fund available Spot exchange rate 180-day forward rate MON 180-day interest rate 10.000.000 MXN2256/ MXN2322 6.00% pa Euro 180-day interest rate 0.50% pa Required: By calculating the forward rate (up to four decimal points based on the covered interest parity, deline the investment strategy that Lionel should take to make a profe (10 points) b. Calculate the possible proft in euro. (15 points) QUESTION 4 OF 4 QUESTION Lionel Sanchez, a foreign exchange trader at ABN AMRO (the Netherlands) is exploring covered interest arbitrage possibilities. He wants to invest 10,000,000 or its Mexican peso (MXN) equivalent in a covered interest arbitrage between MIN and the euro. He faced the following exchange rate and interest rate quotes Abitrage fund available Spot exchange rate 180-day forward rate MON 180-day interest rate 10.000.000 MXN2256/ MXN2322 6.00% pa Euro 180-day interest rate 0.50% pa Required: By calculating the forward rate (up to four decimal points based on the covered interest parity, deline the investment strategy that Lionel should take to make a profe (10 points) b. Calculate the possible proft in euro. (15 points) QUESTION 4 OF 4