The current annual interest rates are 14.000 percent in the United States and 8.000 percent in Japan. The interest rates are continuously compounded. An FI can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. In the foreign currency market, the spot rate is USD 0.0080 per one JPY. And the one-year forward exchange rate is JPY 118.000 per one USD. Assuming that at time t=0 (now), an arbitrager can borrow or lend exactly USD 1,000,000 in the US Interest rate (bond) market. Construct an arbitrage strategy whereby the arbitrager will have zero net cash flow at time t=0 (Now), but will have some positive net cash flow in USD at time one-year from now (t=12 months). What is the amount of that positive net cash flow in USD at time t=12 months from now? The abbreviation USD is for US Dollar, and JPY is for Japanese Yen.

(Give your answer in USD. Round-off to at least 4 decimal places. DO NOT GIVE YOUR ANSWER IN JPY. You are calculating net cash flow at t=12 months (one-year) in USD.)

$2,723.939

$2,617.132

$42,378.942

$66,986.731

$47,720.013

$2,533.405