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Jappa gave the following information in one of his international contracts Spot rate RS 35.0020 = $1 6 months forward rate RS 35.9010 = $1

Jappa gave the following information in one of his international contracts

  1. Spot rate RS 35.0020 = $1
  2. 6 months forward rate RS 35.9010 = $1
  3. Annualized interest rate on 6 months Rupee ( RS) 12%.
  4. Annualized rate on 6 months $, 7%

Required

Workout his arbitrage possibilities.

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