5. Use the following information to answer the following 3 questions

Direct Market for INR/C$ Bids asks

Deutsche Banks quote: INR13.25/C$ INR13.35/C$

Barclays quote: INR13.20/C$ INR13.31/C$

CSFBs quote: INR13.22/C$ INR13.34/C$

Markets for INR/$ and $/C$ dollar bids dollar asks dollar bids dollar asks

Deutsche Banks quote: INR 16.44/$ INR 16.56/$ C$1.225/$ C$1.231/$

Barclays quote: INR 16.42/$ INR 16.55/$ C$1.226/$ C$1.231/$

CSFBs quote: INR 16.46/$ INR 16.53/$ C$1.224/$ C$1.230/$

A. What is the best direct INR/C$ ask price? Compute the best indirect INR/C$ bid price. (These are the clockwise numbers)

Best direct INR/C$ ask price: _______________

Best indirect INR/C$ bid price: _______________

B. What is the best direct INR/C$ bid? Compute the best indirect INR/C$ ask price. (These are the counter-clockwise numbers)

Best direct INR/C$ bid price: _______________

Best indirect INR/C$ ask price: _______________

C. Determine if there is a triangular arbitrage opportunity. (Look clockwise and counterclockwise) If there is an arbitrage opportunity, do it! How much risk-free arbitrage profit is there if you start with $1,000,000 and make one trip around the triangle?