II. The two-year risk-free rate in is 5% per annum, continuously compounded
III. The current French Franc to the GBP currency exchange rate is that one unit of GBP currency costs 0.75 units of French Franc’s
If the observed two-year forward price of one unit of the GBP is 0.850 units of the French Franc, what is your strategy to make an arbitrage profit?
Choose one answer.