solve the following

PROBLEM 10 Following are the rates quoted at National Stock Exchange {NEE} for Canadian Dollar: mn swan Verify whether there is any scope for covered interest arbitrage if you borrow rupees. The risk free rate of interest rate in USA is 8% p.a. and in UK is 5% p.a. The spot exchange rate between US $ and UK f is 1$ = f 0.75. Assuming that is interest is compounded on daily basis then at which forward rate of 2 year there will be no opportunity for arbitrage. Further, show how an investor could make risk-less profit, if two year forward price is 1 $ = 0.85 f. Given e0.-06 = 0.9413 & e-0.16 = 0.852, e0.16 = 1.1735, e-1 = 0.9051Bharat Electronics Limited in Bangalore exports space vehicles to Belgium by importing all the components from south Korea. Imports are invoiced in Hong Kong dollars and exports in Euro. The company is exporting 6000 unit at a pries of Euro 165 per unit. The cost of imported components is HK$ 75. The fixed cost and other variable costs per unit per unit are