Question $1$: Covered Interest Arbitrage $(30$ points$)$

Interest rate in Germany is $3\mathrm{.}2\%$ per year and it is $5\%$ in U$.$S$.$ The spot rate is $\frac{0\mathrm{.}60}{\text{\$}}$ and $3-$month forward rate is $\frac{0\mathrm{.}59}{\text{\$}}.($Start with either $$1,000,000$ or $600,000)$ Please write the currency symbols for the amounts.

Calculate CIA profit potential and decide whether CIA opportunity exists, explain your decision.

If arbitrage opportunity exist which currency do you invest$/$borrow and which forward agreement do you take?

How much arbitrage profit do you make?