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Suppose a bank offers the following exchange rates between US Dollar ($), Euro ({), British Pound (E) and Japanese Yen (* ): $/E 1.20 ie (1 equals $1.20 $/f 1.40 ie f1 equals $1.40 E/f 1.16 i.e. f1 equals (1.16 Y/$ 120 ie $1 equals $120 Y/E 140 ie {1 equals $140 i) Show how you can make a profit with triangular arbitrage transacting at the above exchange rates following two alternative strategies. More specifically, the first one strategy should use trades/conversions only between dollar ($), Euro ({) and British pound (E), while the second strategy must use trades/ conversions only between dollar ($), Euro ({) and Japanese Yen (). In both strategies, assume that you start with 1 dollar ($) in hand. Calculate the profit of each strategy. Which of the two strategies is more advantageous? ii) What is arbitrage? List the forms of arbitrage we can apply to the foreign exchange market