asset expected return weight in portfolio

3. Assume the following exchange rates $2.05 = 1 in New York 410 = 1 in London 200 = $1 in Tokyo (a) What kind of arbitrage is illustrated above? (1 mark) (b) Is it possible for an arbitrageur to make profit or not? Explain in detail (3marks) (c) If the dollar price per pound in newyork reduced to $2.00/ 1, is it now possible for an arbitrageur to make profits or not? If it is eexplain precisely how an arbitrageur might be able to make profit? (4marks) (d) As arbitrage continues, explain precisely why making profits will come to an end? (5marks) 5. Show how the following transactions are entered in the USAs balance of payment. (a) An English commercial bank exchanges $400,000 of its dollar balance for pounds at England's central bank (4marks) (b) An English commercial bank buys $400,000 from its central bank with pounds(4marks) (c) A Zambian citizen borrows $,2000 from a Zambian bank and uses it to buy US stocks (4marks) (d) The USA gives Zambia $300,000 cash aid (4marks) (e) The USA gives Zimbabwe $5000 worth of food aid (4marks)