Question: and the spot exchange rate between the Kenya Shilling ( Kshs ) and the Uganda Shilling ( Ugx ) is 2 8 Ugx per Kshs

and the spot exchange rate between the Kenya Shilling (Kshs) and the Uganda Shilling (Ugx) is 28 Ugx per Kshs.
Required
i. Calculate the 2- year forward exchange rate
ii. suppose that the 2-year forward exchange rate is 27 Ugx per Kshs, determine the arbitrage strategy
iii. suppose that the 2-year forward exchange rate is 31Ugxgx per Kshs, determine the arbitrage strategy (14 marks)
and the spot exchange rate between the Kenya

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