One of UMB$$s high net worth U$.$S$.$ clients is interested in trading British pounds. He is convinced that current market conditions make the British pounds very attractive relative to Euro and other currencies in the region. In order to create the appropriate strategy to determine whether an arbitrage opportunity exists, Caleb lists the market data on Exhibit $6.$

Exhibit $6$

Current $$/$ spot rate

$1\mathrm{.}85$

$1-$year $$/$ forward rate

$1\mathrm{.}70$

$1-$year U$.$S$.$ Interest rates

$8\%$

$1-$year U$.$K$.$ Interest rates

$10\%$