Consider the following: Risk-free zate in the United States Risk-free rate in Australia Spot exchange rate 0.04/year 0.03/year 1.67 AS/S If the futures market price is 1.63 A$/$, how could you arbitrage? Borrow Australian dollars in Australia and invest them there, then convert back to U.S. dollars at the spot price. Borrow U.S. dollars in the United States, invest them in the U.S., and enter futures positions to purchase Australian dollars at the current futures price, There is no arbitrage opportunity. o Borrow Australian dollars in Australia, convert them to dollars, lend the proceeds in the United States, and enter futures positions to purchase Australian dollars at the current futures price. Borrow U.S. dollars in the United States, convert them to Australian dollars, lend the proceeds in Australia, and enter futures positions to sell Australian dollars at the current futures price. 47