4. The 180-day interest rate in the United States is 12.25% per annum. The 180-day interest rate in Canada is 15.25% per annum. The Canadian dollar sells spot in New York for U.S. $.8203/Can$. The Canadian dollar sells 180 days forward in New York for U.S. $.8113.

   1. Are interest rates and forward rates in equilibrium?

   2. For a transaction size of U.S. $600,000, how can an investor take advantage of the

      situation without taking undue risks? Ignore transaction costs and income taxes.