Suppose that the current spot exchange rate is €0.8210/$ and the three-month forward exchange rate is €0.7895/$. The three-month interest rate is 6 percent per annum in the United States and 8 percent per annum in France. Assume that you can borrow up to $1,000,000 or €821,000.
There is no arbitrage opportunity.
Arbitrage can generate a net profit around $45,697.
Arbitrage can generate a net profit around €36,077.
Both B) and C)