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1. You go to a bank and are given these quotes: You can buy a euro for 1.52 Australian Dollar. The bank will pay you
1. You go to a bank and are given these quotes: You can buy a euro for 1.52 Australian Dollar. The bank will pay you 1.51 Australian Dollar for a euro. You can buy a U.S. dollar for .89 euros. The bank will pay you .88 euros for a U.S. dollar. You can buy a U.S. dollar for 1.36 Australian Dollar The bank will pay you 1.35 Australian Dollar for a U.S. dollar. | You have $25,000. Can you use triangular arbitrage to generate a profit? If so, explain the order of the transactions that you would execute and the profit that you would earn. If you cannot earn a profit from triangular arbitrage, explain why. (4)
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