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2. (5 pts) You observe the following quotes: 1 USD = 20.1 MXN (1) 1 EUR = 1.07 USD (2) 1 EUR = 21 MXN

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2. (5 pts) You observe the following quotes: 1 USD = 20.1 MXN (1) 1 EUR = 1.07 USD (2) 1 EUR = 21 MXN (3) a. Is there triangular arbitrage opportunity? b. How much would the arbitrage profit be if you have $1 million USD to start with? c. What market forces would occur to eliminate any further possibilities of triangular arbitrage

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