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Suppose that: Interest rate in the euro zone of i = 5% Interest rate in United Kingdom at I = 6% The spot rate S

Suppose that:

Interest rate in the euro zone of i = 5%

Interest rate in United Kingdom at I = 6%

The spot rate S (/) = x0.8/

The forward rate F1 (x/) = x0.8100/

What is the arbitrage opportunity?

A. Arbitrage opportunity cannot be calculated

B. Borrow and lend

C. Borrow and lend

D. There is no arbitrage opportunity

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