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You have $1000 to invest. Current spot rate of British pound is £1 = $1.45, 1-year...

You have $1000 to invest. Current spot rate of British pound is £1 = $1.45, 1-year forward rate of pound £1= $1.40, 1-year interest rate in U.S.= 2%, 1-year interest rate in Great Britain = 3%. (a) If you use covered interest arbitrage strategy for a 1-year investment, what will be the amount of U.S. dollars you will have after 1 year? (b) Based on your calculation, explain where do you want to invest?

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