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Spot rate of Australian Dollars AUD = CAD 0.300 180-day forward rate of AUD = CAD 0.298 180-day Australias interest rate = 8% 180-day Canadas

Spot rate of Australian Dollars AUD = CAD 0.300

180-day forward rate of AUD = CAD 0.298

180-day Australias interest rate = 8%

180-day Canadas interest rate = 7%

The details are given as shown above. Determine if covered interest arbitrage would be worthwhile for Australian investors who have AUD to invest. By having AUD 2,000,000 as the initial investment calculate and explain your answer.

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