In the foreign exchange market, suppose the spot price of Euro in term of USD is S$,$ that is$,$

one Euro is equivalent to S USD. The market one year forward price of Euro in term of USD is

F$,$ the one year simple interest rate of Euro is e$,$ and the one year simple interest rate of USD

is d$.$ If F $>$ S$(1+$d$)/(1+$e$).$ What kind of arbitrage opportunity exists? Please explain each trade

you plan to take. $($You don$$t need to worry about the exact amount of currencies to buy, sell,

borrow, or lend.$)(10)$