Assuming the following swap curve in 1995 before the planned start of the Euro in 1998

Tenor FRF DEM 5y 6.10 4.50 5y5y 4.50 3.75

FRF stands for French Franc and DEM for Deutsche Mark

29. What arbitrage trade seems to make sense ?

    1. Pay 5y5y FRF and receive 5y5y DEM

    2. Receive 5y5y FRF and pay 5y5y DEM

    3. Receive 5y5y FRF and rec 5y5y DEM

    4. Pay 5y5y FRF and pay 5y5y DEM

30. What is the rationale behind this trade

    1. It is a convergence trade between currencies entering monetary union

    2. It is a divergence trade between currencies entering monetary union

    3. It a curve trade between currencies entering monetary union

    4. It is a basis trade between currencies entering monetary union