Assume you are a trader in foreign currencies, and you look for arbitrage. From the quote screen on your computer terminal, you observe the exchange rate quotations below

Bank Quotations	Rate
Citi Bank :	$1.8501/
UBS :	$1.3325/
Barclays Bank :	1.3469/

Show how you can make a triangular arbitrage profit by trading at these prices. (Ignore the ask-bid spread for this question) Assume you have 5,000 with which to conduct the arbitrage. (Please note that your answers are worth zero mark if they do not include currency symbols , $, )

Explain what a triangular arbitrage is. What is a condition that will give rise to a triangular arbitrage opportunity?

What / price will eliminate triangular arbitrage?

How you can make a triangular arbitrage profit by trading at these prices? What is the profit? Explain and discuss your calculations.