4. (a) You observe the following quotes for the USD/AUD in the spot market from two banks: Bank of Sydney Bank of New York Bid Ask Bid 0.6926 Ask 0.6928 0.7030 0.7075 Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculate the potential profit if you are able to use AUD 25,000. If not, explain why arbitrage is not possible? (5 marks) (b) You observe the following quotes for the GBP /AUD in the spot market from two banks: Bank of Melbourne Bid 0.5453 Bank of London Ask Bid 0.5407 Ask 0.5411 0.5458 Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculate the potential profit if you are able to use GBP 50,000. If not, explain why arbitrage is not possible? (10 marks) c) You observe the following quotes for the CHF /AUD in the spot market from two banks: Bank of Switzerland Bank of Australia Ask Bid Ask Bid 0.7054 0.7116 0.7095 0.7002 Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculate the potential profit if you are able to use CHF 250,000. If not, explain why arbitrage is not possible? (10 marks)