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The interest rate in UK is 5% per annum and the interest rate in the US is 2% per annum. The spot exchange rate is

The interest rate in UK is 5% per annum and the interest rate in the US is 2% per annum. The spot exchange rate is $1.25 per pound. If the spot rate one year later turns out to be $1.30 per pound what will be the profit for a speculator? Assume the speculator borrows $100 in the US and invests in UK.

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