1. The Kenya rates as specified by the Monetary Committee of central banks was 8%, 1% above the Central Bank Rate. He has further, entered into a forward contract with bank of India to sell foreign exchange at a forward rate of kes 112/$. The prevailing exchange rate between Kenya shillings and the USA Dollar was kes 110/1$

Compute Covered interest arbitrage or disarbitrage. Explain the cause of the results.