Direct Market for INR/C$ Deutsche Bank's quote: Barclays' quote: CSFB's quote: Markets for INR/$ and $/C$ Deutsche Bank's quote: Barclays' quote: CSFB's quote: Bids dollar bids INR 16.30/$ INR 16.35/$ INR 16.32/$ Best direct INR/C$ ask price: Best indirect INR/C$ bid price: asks INR12.85/C$ INR13.00/C$ INR12.90/C$ INR12.99/C$ INR12.87/C$ INR13.01/C$ Best direct INR/C$ bid price: Best indirect INR/C$ ask price: A. What is the best direct INR/C$ ask price? Compute the best indirect INR/C$ bid price. (These are the clockwise numbers) dollar asks dollar bids dollar asks INR 16.50/$ C$1.241/$ C$1.255/$ INR 16.45/$ C$1.245/$ C$1.257/$ INR 16.45/$ C$1.248/$ C$1.256/$ B. What is the best direct INR/C$ bid? Compute the best indirect INR/C$ ask price. (These are the counter-clockwise numbers) C. Determine if there is a triangular arbitrage opportunity. (Look clockwise and counter- clockwise) If there is an arbitrage opportunity, do it! How much risk-free arbitrage profit is there if you start with $1,000,000 and make one trip around the triangle?

A. What is the best direct INR/C\$ ask price? Compute the best indirect INR/C $ bid price. (These are the clockwise numbers) Best direct INR/CS ask price: Best indirect INR/C $ bid price: B. What is the best direct INR/C\$ bid? Compute the best indirect INR/C\$ ask price. (These are the counter-clockwise numbers) Best direct INR/C\$ bid price: Best indirect INR/CS ask price: C. Determine if there is a triangular arbitrage opportunity. (Look clockwise and counterclockwise) If there is an arbitrage opportunity, do it! How much risk-free arbitrage profit is there if you start with $1,000,000 and make one trip around the triangle