Exchange Rates and International Finance Manolis who has graduated with an MBA from HOU is working as a financial trader at HB bank. The HB bank is quoting the following exchange rates against the US dollar ($) for the euro () and the Swiss franc (CHF): $ 1 = 0.8 and $ 2 = 1.2. Manolis observes that the HBE bank is currently quoting the exchange rate between the euro and the Swiss franc as 3 = 0.7. a) Ignoring transactions costs, does Manolis have an arbitrage opportunity based on these quotes? b) If he has 5,000,000 US dollars, what steps would he take to make an arbitrage profit and how would he profit? Comment on your findings. c) What happens if he initially decides to sell US dollars for euros? d) What 3 eliminates arbitrage opportunities? Comment on your findings