Question: 39.Assume the following information: Current spot rate of New Zealand dollar=$.41 Forecasted spot rate of New Zealand dollar 1 year from now=$.43 One year forward

39.Assume the following information:

Current spot rate of New Zealand dollar=$.41

Forecasted spot rate of New Zealand dollar 1 year from now=$.43

One year forward rate of the New Zealand dollar=$.42

Annual interest rate on New Zealand dollars=8%

Annual interest rate on U.S. dollars=9%

Compute the return from covered interest arbitrage by a U.S. investor with $500,000 to invest.

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