Question: show all work using formulas, please and thankyou. 3. (1.5 points) A foreign exchange trader based in the U.S., authorized to borrow $600,000 or its

show all work using formulas, please and thankyou.

3. (1.5 points) A foreign exchange trader based in the U.S., authorized to borrow $600,000 or its foreign currency equivalent, faces the following quotes: Spot rate $1.3500/pound Three month forward $1.3625/pound US interest rate 6.00% per annum British interest rate 5.00% per annum Is covered interest arbitrage possible? a yes be no If your answer is yes, how much risk free profit could she eam? Show all steps

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