STEP: 2 of 5 Suppose you observe that 90-day interest rate across the eurozone is 6%, while the interest rate in the U.S. over the same time period is 3%. Further, the spot rate and the 90-day forward rate on the euro are both $1.60. You have $600,000 that you wish to use in order to engage in covered interest arbitrage. To start, you exchange your $600,000 for rate (for when you convert the euros back to dollars), you euros, and deposit the funds in a bank in the eurozone. To lock in the exchange euros forward at a forward rate of $1.60. sell Grade Step 2 (to complete this stop and unlock the next stop) TOTAL SCORE: 1/5 buy Grade It Now Save & Continue Continue without saving