A currency dealer has good credit and can borrow either $1,000,000 or 800,000 for one year. The one-year interest rate in the U.S. is i$ = 2% and in the euro zone the one-year interest rate is i = 6%. The one-year forward exchange rate is $1 = 0.8333; what must the spot rate be to eliminate arbitrage opportunities?

• A. $1.2471 = 1.00
• B. $0.8019 = 1.00
• C. $1.1547 = 1.00
• D. none of the above