5. The spot market rate for the British pound is $1.6035/?. The 3-month future

5. The spot market rate for the British pound is $1.6035/?. The 3-month futures (forward) rate on the British pound is $1.6027/?. The yield on
a 3-month U.S. Treasury bill is 0.24 percent annual percentage rate (APR). The yield on a 3-month British government
security is 0.48 percent annual percentage rate (APR). Show that interest rate parity (IRP) does not hold by solving for
the forward rate that ensures IRP. How would you take advantage of the arbitrage opportunity arising from the actual data (i.e. borrow 1000000 pounds
convert to dollars invest in the U.S. sell the proceeds forward and repay your loan or borrow 1000000 dollars convert to pounds invest in the U.K. sell
the proceeds forward and repay your loan)?