c. Assume that the exchange rate of 1 euro in New York is $1.1727 and in Paris it is $1.1737

i. What actions would arbitrageurs take to realize gains? (1 Mark)

ii. How much will they gain (in dollars) with $10,000,000 traded? (1.5 Marks)

iii. What will be the impact of their actions on the dollar price of the euro in New York? Also, on the euro price of the dollar in Paris? (1.5 Marks)