Using the forward rates from Barchart, combined with the current interest rates from CNBC Bonds page, evaluate if interest rate parity holds for the GBP/USD exchange rate predicted for 1 year from now. (Note: you can use bid/ask midpoint for question)

A Show the arbitrage profits available if you have $1,000,000?

B. Compare the Barchart forward price to the CME group futures price. How would you arbitrage this difference? Show the steps you would take and the profits available to a $1,000,000 investment?

Rates:

UK 1 year .462%

US 1 year 1.624%

Spot forward Rate GBP/USD 1.23209

1year Barchart Forward 127.00

1 year CME Futures 1.2425