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3. Suppose the Swiss Franc is currently traded at SFR 1.40/$. The British Pound is traded at GBP 1.39/$. Ignoring transaction costs: a) DeterminetheSFR/GBPexchangerateconsistentwiththesedirectquotations. b)

3. Suppose the Swiss Franc is currently traded at SFR 1.40/$. The British Pound is traded at GBP 1.39/$. Ignoring transaction costs:

a) DeterminetheSFR/GBPexchangerateconsistentwiththesedirectquotations. b) Suppose the SFR/GBP cross rate in the market was at SFR 1.05/GBP. Is there any arbitrage opportunity?

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