Assume that one euro (EUR) currently costs NOK 8.00 in the spot market and NOK 7.65 in the 6-month forward market. NOK-denomiated, one-year government-issued money market securities currently yield 3.25 percent, while the one-year rate on similar, risk-free Euro-certificates is 4 percent. One-year borrow- ing rates are 3.40 percent and 4.15 percent, respectively, in NOK and EUR Please answer the questions below: (a) (10 points) Calculate the NOK-return on a one-year NOK 1 million investment in Euro- certificates using the forward market. (10 points) Briefly explain whether or not the quotes above facilitate currency arbitrage (b) If there is an arbitrage opportunity, how do you proceed to exploit it? Assume that one euro (EUR) currently costs NOK 8.00 in the spot market and NOK 7.65 in the 6-month forward market. NOK-denomiated, one-year government-issued money market securities currently yield 3.25 percent, while the one-year rate on similar, risk-free Euro-certificates is 4 percent. One-year borrow- ing rates are 3.40 percent and 4.15 percent, respectively, in NOK and EUR Please answer the questions below: (a) (10 points) Calculate the NOK-return on a one-year NOK 1 million investment in Euro- certificates using the forward market. (10 points) Briefly explain whether or not the quotes above facilitate currency arbitrage (b) If there is an arbitrage opportunity, how do you proceed to exploit it