Question: PLEASE SHOW WORK The current exchange rate between USD and AUD is $0.8865. If the interest rate in the US is 3% and the interest

PLEASE SHOW WORK

The current exchange rate between USD and AUD is $0.8865. If the interest rate in the US is 3% and the interest rate in Australia is 5% annually, you spotted a 1 year forward contract with rate of $0.8685. You can trade up to $50,000,000 USD. How much money can you make if you carry out an arbitrage trade?

PLEASE SHOW WORK

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