Consider a call option on the U.S. dollar written in Indian rupees (). The current spot exchange

Question:

Consider a call option on the U.S. dollar written in Indian rupees (₹). The current spot exchange rate is ₹ 70/$, the Indian interest rate is 7 percent, and the U.S. interest rate is 5 percent (both annual compounding). If you observe a one-year at-the-money call option trading for ₹ 1.2/$, what transaction would an arbitrageur pursue? (Assume that the call option is European.)

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...