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Assume the following information for a bank quoting on spot exchange rates: Value of Singapore dollar in US $ = $0.6098/S$ Value of pound in

Assume the following information for a bank quoting on spot exchange rates:

Value of Singapore dollar in US $ = $0.6098/S$

Value of pound in US$ = $1.8828/E

Value of pound in Singapore dollars = S$3.0052/E

A. Calculate the appropriate cross rate of pound in Singapore dollars.

B. Is the pound overpriced or underpriced relative to the Singapore dollar? Why?

C. Is triangular arbitrage possible? If so, explain the detailed steps of the triangular arbitrage and compute the profit from this strategy if you have $1,000,000 to use.

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