James Clark is a currency trader with Wachovia. He notices the following quotes:

spot exchange rate: SFr1.2053/$
Six-month forward exchange rate: SFr1.1924/$
Dollar interest rate: 2.50% per year
Swiss franc interest rate: 2.00% per year

a. Is the interest rate parity holding? You may ignore transaction costs.
multiple choice
Yes
No

In the previous problem, is there an arbitrage opportunity? If so, state exactly how it should be conducted, assuming that $1,000,000 is available to execute the arbitrage.