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1. Assume you are a U.S.-based treasurer with $1,000,000 to invest. The dollar-euro exchange rate is quoted as $1.60 = 1.00 and the dollar-pound exchange

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1. Assume you are a U.S.-based treasurer with $1,000,000 to invest. The dollar-euro exchange rate is quoted as $1.60 = 1.00 and the dollar-pound exchange rate is quoted at $1.8 = 1.00. If a bank quotes you a cross rate of 1.00 = 1.25 Would you be able to arbitrage? If so, what is the arbitrage profit

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