3) (35 points) Assume that you are a trader with Barclays Bank in London. From the screen on your terminal, you notice that HSBC Bank is quoting $ 1.5500 / 1.00. Credit Suisse is quoting SF 1.4240 / $ 1.00. You learn that UBS is making a direct market between Swiss franc and British pound, with a current SF/ quote of 2.1525. Assume have $ 15,500 to conduct the arbitrage. a) Is there an arbitrage opportunity? Show the required calculations. b) If your answer to part a is yes, show how you can make a triangular arbitrage profit by trading at these prices explaining each step in the arbitrage process. c) What should be the equilibrium SF/ price to prevent any arbitrage opportunity? 3) (35 points) Assume that you are a trader with Barclays Bank in London. From the screen on your terminal, you notice that HSBC Bank is quoting $ 1.5500 / 1.00. Credit Suisse is quoting SF 1.4240 / $ 1.00. You learn that UBS is making a direct market between Swiss franc and British pound, with a current SF/ quote of 2.1525. Assume have $ 15,500 to conduct the arbitrage. a) Is there an arbitrage opportunity? Show the required calculations. b) If your answer to part a is yes, show how you can make a triangular arbitrage profit by trading at these prices explaining each step in the arbitrage process. c) What should be the equilibrium SF/ price to prevent any arbitrage opportunity