b) If there is a covered interest arbitrage how can an arbitrager take advan situation assume the arbitrager is willing to borrow $4000 or French Franc (F)20000 and there are no transaction costs. 10. ABC Ltd is a manufacturing company in England, it is the wholly owned subsidiary of XYZ Ltd of US. The functional currency for ABC Ltd is E which currently sells at $1.5/. The reporting currency for XYZLtd is US\$. Non-consolidated financial statement for ABC and a. Prepare a consolidated Balance Sheet for XYZ ltd. b. What is ABC Itd accounting exposure in US\$. Use current rate method for the calculation