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1. Absence of triangular arbitrage On November 1st, the NOK/USD exchange rate was 8.4097, and the NOK/EUR exchange rate was 9.7368. On December 1st, the

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1. Absence of triangular arbitrage On November 1st, the NOK/USD exchange rate was 8.4097, and the NOK/EUR exchange rate was 9.7368. On December 1st, the NOK/USD exchange rate was 9.0326 and the NOK/EUR exchange rate was 10.2195. (a) Compute the USD/EUR exchange rates on November 1st and December 1st, respectively (b) Did the EUR appreciate or depreciate vis-a-vis the USD? Did the USD ap- preciate or depreciate? (c) If a bank misquoted you a USD/EUR exchange rate of 1.0800 USD/EUR on December 1st, you would, obviously have let them know of the error. Hypothetically, how could you have traded to benefit from this misquote

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