Suppose that you have an extra U.S. $1,000,000 to invest for six months. You are considering the purchase of U.S. T-bills that yield 1.810 percent (that's a six month rate, not an annual rate by the way) and have a maturity of 26 weeks. The spot exchange rate is 200 Won/$, and the six month forward rate is 220 Won/$, . The interest rate in South Korea (on an investment of comparable risk) is 13 percent. What is your strategy? Take $1m, translate into Won at the spot, invest in South Korea , hedge with a short position in the forward contract. O Take $1m, translate into yen at the spot, invest in South Korea, and repatriate your Won earnings back into dollars at the spot rate prevailing in six months. Take $1m, invest in U.S. T-bills. Take $1m, translate into Won at the forward rate, invest in South Korea, hedge with a short position in the spot contract. Suppose that the current spot exchange rate is 1.50/ and the one-year forward exchange rate is 1.60/. The one-year interest rate is 5.4% in euros and 5.2% in pounds. What is your arbitrage strategy if you can borrow at most 1,000,000 or the equivalent pound amount, i.e., 666,666.67, at the current spot exchange rate? 42,583.34 128.728.53 68.133.34 E8.328.34