Quotes for the dollar and euro are followed:

Spot contract midpoint S₀^/$= 0.8890/$

One-Year forward contract midpoint F₁^/$= 0.8960/$

One-Year Eurodollar Interest rate i^$ = 3% per year

(a)Your newspaper does not quote one-year Eurocurrency interest rates on EU euros. Make your own estimate of i.

(b) Suppose that you can trade at the prices for S^/$, F^/$ and i^$ just given and that you can also either borrow or lend at a Thai Eurocurrency interest rate of i= 4% per year. Based on a one million (monetary units) initial amount, how much profit can you generate through covered interest arbitrage?