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Suppose that the current spot exchange rate is 0.8250/$ and the three month forward exchange rate is 0.8132/$. The three-month interest rate is 5.80 percent

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Suppose that the current spot exchange rate is 0.8250/$ and the three month forward exchange rate is 0.8132/$. The three-month interest rate is 5.80 percent per annum in the United States and 5.40 percent per annum in France. Assume that you can borrow up to $1,000,000 or 825,000. Show how to realize a certain profit via covered interest arbitrage, assuming that you want to realize profit in terms of U.S. dollars. Also determine the size of your arbitrage profit

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