Suppose you observe that 90 -day interest rate across the eurozone is 7%, 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 $500,000 that you wish to use in order to engage in covered interest arbitrage. After 90-days in the bank, you withdraw your 334,375 euros from the bank in the eurozone, and exchange them for dollars in order to fulfill the forward contract, receiving $ . This represents a profit of $ over your initial $500,000