7. (15 points) A foreign exchange trader at Goldman Sachs (NYSE:GS) analyzed the potential for an arbitrage profit given the following quotes for the Chinese yuan (), Indian rupee (), and South Korean won (): bid quote ask quote Credit Suisse (NYSE:CS) quotes for the rupee 0.100/ 0.102/ Deutsche Bank (NYSE:DB) quotes for the yuan 154.0/ 158.0/ BNP Paribas (Euronext:BNP) quotes for the rupee 16.40/ 16.90/ The trader concluded that there is indeed a possibility for an arbitrage profit, and used one million Indian rupee (1,000,000) to take advantage of the arbitrage opportunity.

Describe the exact details of the foreign currency transaction that the trader made with each bank in order to earn the arbitrage profit. [hint: The trader made three transactions, which can be fully described by: the counterparty, the currency and amount given, the currency and amount received. The combination of the three trades yields a profit]

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