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3. Citibank quotes NZ$1 = US$ 0.6624. Deutsche Bank quotes 1 = US$1.1758. BNZ Bank quotes 1 = NZ$1.7762. a. If these quotes are simultaneously

3. Citibank quotes NZ$1 = US$ 0.6624. Deutsche Bank quotes 1 = US$1.1758. BNZ Bank quotes 1 = NZ$1.7762.

a. If these quotes are simultaneously observed spot rates, can you make an arbitrage profit? If so, calculate what profit would you make if you started with N$ 1 million. Assume that there are no transaction costs.

b. What would be your arbitrage profit if you were to incur total transaction costs of 0.1% of the amount used for conversions?

Please, answer parts (a and b ) and step by step and in a very clear way

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