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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
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. How much profit does investing $5,000,000 (or its yen equivalent) in a covered interest arbitrage between US dollars and Japanese yen yield?
$148,701.20 or 16,034,450
$148,701.20 or 16,587,619
$160,597.47 or 17,317,225
$160,597.47 or 17,914,648
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