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Determine the possibility for arbitration with an amount of 100,000 in the given situation. Interest rate in Australia and China are 5% and 3% respectively.1

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Determine the possibility for arbitration with an amount of 100,000 in the given situation. Interest rate in Australia and China are 5% and 3% respectively.1 Year forward premium/discount of the currency pair AUD and CNY is 2%. a. Borrow CNY 100,000 and invest in Australia for 1 year b. Borrow AUD 100,000 and invest in China for 1 year c. None of the option is correct d. No possibility for arbitration in the given situation

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