5. (10 pts) If the Singapore Dollar/US dollar exchange rate is 1.38 SGD/$, 1-year US interest rates are 2.00% and 1-year

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5. (10 pts) If the Singapore Dollar/US dollar exchange rate is 1.38 SGD/$, 1-year US interest rates are 2.00% and 1-year

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5. (10 pts) If the Singapore Dollar/US dollar exchange rate is
1.38 SGD/$, 1-year US interest rates are 2.00% and 1-year
Singaporean interest rates are 1.62%, and the 1-year forward SGD/$
exchange rate is 1.35, describe a set of transactions that would
result in an arbitrage profit.
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