If the risk$-$free rate is $6\%,$ and the repo rate is $5\%,$ then how could an arbitrageur use this information to make profits?

Question $4$ options:

The arbitrageur would borrow at the risk$-$free rate, buy the spot asset and enter into a short forward contract to sell the asset in the future at the forward price.

The arbitrageur would short the asset, invest the proceeds at the risk$-$free rate, and enter into a long forward contract to buy the asset in the future at the forward price.

The arbitraguer would borrow at the risk$-$free rate and invest the proceeds a the repo rate.

The arbitrageur would borrow at the risk$-$free rate, short the asset, and enter into a long forward contract to buy the asset in the future at the forward price.