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The spot exchange rate is 111.55/$, the 180-day forward exchange rate is 107.83/$, the 180-day dollar interest rate is 1.2% per year, and the 180-day

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The spot exchange rate is 111.55/$, the 180-day forward exchange rate is 107.83/$, the 180-day dollar interest rate is 1.2% per year, and the 180-day yen interest rate is 0.7% per year. Models suggest that spot will remain close to 110.00/$ over the next 180 days. If expectations are wrong and 118.60/S is the spot in 180 days, then how much profit does investing S5,000,000 (or its yen equivalent) in an uncovered interest arbitrage between US dollars and Japanese yen yield? -$58,201.14 or-6,402,125 -$60,597.47 or-6,534,225 -$190,597.47 or-21,261,148 -$300,757.80 or-$35,669,875

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