Find the profit in terms of percentage returns you could, Financial Management

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Find the profit in terms of percentage returns you could

Suppose that the one year forward rate is €1.2/$. .As of today, the spot exchange rate is €1.6/$. The U.S. interest rate is 4% and the interest rate in the euro zone is 8%. Assume the US is the home country Round intermediate steps to four decimals. Enter your answer in decimal format. (EX: .XXXX). Find the profit (in terms of percentage returns) you could earn via covered interest arbitrage.

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Financial Management: Find the profit in terms of percentage returns you could

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