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How to calculate this question, what is the process? 4.43 The following exchange and...

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How to calculate this question, what is the process?

4.43 The following exchange and interest rate quotations in 1998 were observed: Chapter 4, Parity Conditions in International Finance and Currency Forecasting Exchange rate per S Eurocurrency rates 90-days (% annum) (Discretely-compounded) 90-day forward Spot $ DM DM DM Bid 7 7/8 12 1/4 1.881 4961 1.801 4937 15 5/8 Ask 16 8 1/4 13 1.843 4902 1.773 4889 An arbitrage profit can be obtained by a) borrowing pounds and lending dollars b) borrowing dollars and lending DM c) borrowing DM and lending pounds d) there are no arbitrage opportunities

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