The annualized interest rate for a horizon of 5 months is 6.3% while the annualized interest rate for a horizon of 2 months is 6.068%

Question:

1. Compute the annualized forward rate between 2 and 5 months that prevails if there are no arbitrage opportunities (answered this and found forward rate (2,5) was 6.454%)
2. We assume that the annualized forward rate between 2 and 5 months is 7% on the markets. Show how to implement an arbitrage strategy.