Q.1 What do you mean by covered interest arbitrage in the foreign exchange market? When does the opportunity for covered interest arbitrage exist? Given the following data: Spot-rate: USD/INR 45.00 3-month forward rate: USD/INR 45.90 Annualized interest rate on 3-month Rupee: 6.5% Annualized interest rate on 3-month Dollar: 3.5% Find out if any arbitrage opportunity is possible? If yes, explain and also calculate the arbitrage profits if any assuming an amount in multiple of thousand)