The interest rate in Japan is 4%, whereas the interstrate in the UK is 5%. The spot exchange rate right now is 131 68 yen per pound. The day forwww is 130 yen per poud. Figure out a way to make a profit and explain what steps you would undertake to make the proft. If you enter into a forward correct, be clear who whether you way with contract, () how much and in what currency you are entering into the contract for when you enter into the contract, and when you follow through with the terms of the correct. Round the amount of each exchange to the 1/100th of the currency you are dealing with. Do use complete sets. Start with 1.500.000 units of the currency you start wit The arbitrager should start by borrowing money in Japan and would make a profit of 6,028.85 yen. If the arbitrageur borrows 1,500,000 yen in Japan, the arbitrageur would then exchange those yen in the spot market for 11,301.25 pounds. The artirage then lends the 11,201 25 pounds in the UK at 5% interest. The arbitraguer would also sell a forward contract for 11,960.81 pounds. Ater a year, the arbitrageur will receive 11.960.81 pounds from the money tort in the UK The arbitrageur will then exchange those 11,960,81 pounds through the Forward contract for 1,566,028.85 yen. The arbitrageur must pay back its loan in Japan plus interest or 10,000 yen. This gives a profit of 1,566,028.85 - 1,560,000 or 6,0285 yen Click to select your answer(s)