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Assume there is a direct cross market for GBP/Sf. Assume the spot FX rates with the USD are 1.5 Sf/$ and 1.50 $/. What should

Assume there is a direct cross market for GBP/Sf. Assume the spot FX rates with the USD are 1.5 Sf/$ and 1.50 $/. What should be the direct cross-rate be for Sf/?

If the direct cross-rate is 2.50 Sf/, what three deals can you do to lock in a risk free profit on 1 unit of the base currency? Calculate the arbitrage profit.

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