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2. John specializes in cross-rate arbitrage. He notices the following quotes: Swiss franc/dollar = SFr1.5971/S Australian dollar/U.S, dollar =A$1.8215/$ Australian dollar/Swiss franc =A$1,1300/SEL Ignoring transaction

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2. John specializes in cross-rate arbitrage. He notices the following quotes: Swiss franc/dollar = SFr1.5971/S Australian dollar/U.S, dollar =A$1.8215/$ Australian dollar/Swiss franc =A$1,1300/SEL Ignoring transaction costs, does John have an arbitrage opportunity based on these quotes? If there is an arbitrage opportunity, what steps would he take to make an arbitrage profit, and how would he profit if he has $1,000,000 available for this purpose: (15 marks)

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