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5. Arbitrage. What are the different types we discussed? In order for arbitrage to be possible, must the market be in equilibrium or disequilibrium? a.

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5. Arbitrage. What are the different types we discussed? In order for arbitrage to be possible, must the market be in equilibrium or disequilibrium? a. Assume you have $100,000 and are presented with the following quotes. Is there a profitable strategy? If so, what is the strategy and how much would your dollar profit be? Spot rate of the euro Spot rate of the peso Cross-rate of the peso in euros = $1.20 - $0.065 0.05

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