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Assume the following exchange price quotes are available: Per unit Euro$1.2223/ Per unit Pound Sterling$1.8410/ Per unit of Pound Sterling1.5100/ i.Given this information, substantiate your

Assume the following exchange price quotes are available:

Per unit Euro$1.2223/

Per unit Pound Sterling$1.8410/

Per unit of Pound Sterling1.5100/

i.Given this information, substantiate your answer to show that triangulararbitrage is possible.

(4marks)

ii.Explain the steps that would reflect triangular arbitrage and compute the profit made (in USD), if you start with USD1million.

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