4. Consider the following triangular arbitrage problem.

There are three banks each with quoted currency exchanges. Bank A: $ 1 = 0.84 Bank B: $ 1 = 0.86 Bank C: 1 = 0.93

a. Using the quoted exchange rates in the previous table, create a triangle diagram and calculate the implicit cross rates.

b. Determine and describe an arbitrage process if you are given an initial $10 million. Describe the transactions and the final value after the arbitrage is completed.