A) Following are the quotation by Bank XYZ

	Quoted Bid price	Quoted Ask Price
Value of a British Pound in U.S. dollars	$ 1.60	$ 1.61
Value of a Australian Dollar (A$) in U.S. dollars	$ 0.75	$ 0.76
Value of British pound in Australian Dollars (A$)	A$ 2.00	A$ 1.90

Assume that you are a speculator and have $10,000.

i. What will be your steps to gain from triangular arbitrage?

ii. Will triangular arbitrage be worthwhile under this condition?

B) Assume that the exchange rate is in equilibrium initially. Then USA (home country) experiences a 4% inflation rate, while UK (foreign country) experiences a 7 % inflation rate. According to Purchasing power parity, what will be the percentage change in foreign currency? If the spot rate of British pound is $ 1.62, what will be the rate after adjustment?