Previous question:

If the actual forward rate is .96/$, find the percentage return available to this investor via covered interest arbitrage. Round intermediate steps and your final answer to four decimals and enter your answer in decimal format (EX: .XXXX).

QUESTION 4 Which of the following would eliminate the covered interest arbitrage profit found in the previous question? O An increase in the forward rate for dollars in terms of pounds O An increase in the spot rate for dollars in terms of pounds O A decrease in the spot rate for dollars in terms of pounds O Covered interest arbitrage was not possible in the previous question QUESTION 5 Suppose you observe the following spot quotes for Canadian dollars and pounds. What is the maximum profit you could earn (in terms of Canadian dollars) via locational arbitrage if you have C$10,000,000 at your disposal? Round intermediate steps to four decimals and your final answer to two decimals. Do not use currency symbols or words when entering your answer. Bank X: C$1.1155-65 Bank Y: .8890-92 QUESTION 4 Which of the following would eliminate the covered interest arbitrage profit found in the previous question? O An increase in the forward rate for dollars in terms of pounds O An increase in the spot rate for dollars in terms of pounds O A decrease in the spot rate for dollars in terms of pounds O Covered interest arbitrage was not possible in the previous question QUESTION 5 Suppose you observe the following spot quotes for Canadian dollars and pounds. What is the maximum profit you could earn (in terms of Canadian dollars) via locational arbitrage if you have C$10,000,000 at your disposal? Round intermediate steps to four decimals and your final answer to two decimals. Do not use currency symbols or words when entering your answer. Bank X: C$1.1155-65 Bank Y: .8890-92