WHAT IS THE ARBITRAGE PROFIT/LOSS?

An investor is planned to invest $500000 in Mexico.

Expected inflation rate:

US 1.25% per year

Mexico 3.40% per year

Expected interest rate:

US 1.5% per year

Mexico 6.5% per year

Nominal Exchange Rates

Spot 19.850 Pesos=US $1

One-year forward 19.860 Pesos=US $1

The Mexican peso was the first coin in the world to use the sign $, even before the US dollar.

The future forward spot exchange rate is 19.750 pesos = US$1 ( This part is only given as a detail i think, there is no future forward rate)