Suppose that the U.S. interest rate on one year Treasury notes was 4.5%. We will use this as the annual interest rate in the U.S. And suppose that the interest rate on the one-year German Treasury note was 4.1%. The spot rate is 1.0162 EUR/USD.. And the 3-month forward rate is 1.0188 Eur/USD. Is there an opportunity for covered interest arbitrage?

If so, what would be the total profit if we borrowed $20 million for 3 months?

	A.	YES- $27,395.21 would be the profit
	B.	YES- $29,385.41 would be the profit
	C.	YES- $31,695.53 would be the profit
	D.	YES- $33,875.42 would be the profit
	E.	NO- there is no opportunity for a profit