You have £1,000,000 to invest for 3 months – take 3 months to be exactly 0.25 of a year.
Current spot rate of pound = $1.50
90 day forward rate of pound = $1.45
3 month deposit rate in U.S. = 12% pa
3 month deposit rate in UK = 20% pa
If you utilise the spot and forward markets to invest in the USA, what will be your US return compared to your UK return?