Assume the following information:
Quoted Price Spot rate of Singapore dollar $.75
90 day forward rate of Singapore dollar $.74
90 day Singapore interest rate 4.5%
90 day U.S. interest rate 2.5%
Given this information, what would be the yield (percentage return) to a U.S. investor who used covered interest arbitrage? (Assume the investor invests $1,000,000.) What market forces would occur to eliminate any further possibilities of covered interest arbitrage?