Question: Given data below Spot rate 1$= Rs 64 Interest rate prevailing in India = 12% Interest rate prevailing in US = 7% Fair Forward Rate

Given data below

Spot rate 1$= Rs 64

Interest rate prevailing in India = 12%

Interest rate prevailing in US = 7%

Fair Forward Rate (FFR) (1 Year): $1 = Rs 6.99

Actual Forward Rate (AFR) (1 Year): $ 1 =Rs 5.90

Determine the possible Arbitrage Gain

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