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Assume the following information: Current spot rate of New Zealand dollar $.6686 Forecasted spot rate...

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Finance

Assume the following information: Current spot rate of New Zealand dollar $.6686 Forecasted spot rate of New Zealand dollar 1 year from now $.7012 One-year forward rate of the New Zealand dollar $.6849 Annual interest rate on New Zealand dollars 5% Annual interest rate on U.S. dollars 6% Compute the return from covered interest arbitrage by a U.S. investor with $1000 to invest.

8.58%

5.00%

7.55%

2.55 %

6.00%

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