Is there an arbitrage opportunity here if so explain


Suppose the 12 month forward price of the dollar in terms of the yen is 144 yen per dollar. Suppose that the spot price of the dollar in terms of yen is 160. Next suppose that the current annual interest rate on yen deposits is 3%, while the interest rate a comparable dollar deposit is 12%. There are no transaction costs. Is there an arbitrage opportunity here? If so, explain exactly how you would take advantage of this situation to make a riskless profit.

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Macroeconomics: Is there an arbitrage opportunity here if so explain
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