Your U.S. company has $6,000,000 to be invested for the next 180 days. Using only the data given below, answer the following questions. (a and b).

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U.S. interest rate (annual): 4.075%

Mexico interest rate (annual): 4.075%

Spot rate: 1 Mexican Peso equals 0.055619 U.S. Dollar

180 day forward rate: 1 Mexican Peso equals 0.056181 U.S. Dollar

Your forecast of the spot rate

In 180 days: 1 Mexican Peso equals 0.055508 U.S. Dollar

a.) If you had the ability to use the forward market, where should you invest to earn more and what is the net difference in earnings (dollars)? Show the necessary calculations. (15 points)

b.) If you had 100% certainty that your forecast would come true, where should you invest to earn more and what is the net difference in earnings (dollars)? Show the necessary calculations. (15 points)