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Following quotations are available in three markets: Particulars GBP USD | 3 London (Indirect Quote) 1.7896 New York (Direct Quote) 1.8105 Frankfurt (Direct Quote) 4.0235

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Following quotations are available in three markets: Particulars GBP USD | 3 London (Indirect Quote) 1.7896 New York (Direct Quote) 1.8105 Frankfurt (Direct Quote) 4.0235 2.2760 DM 4.1095 0.4536 You have GBP 100,000. Can you make arbitrage opportunities between Pounds, DM and Dollars? Will the speculator get profit in which location? [4 Marks] Can you make arbitrage opportunities between Pounds, USD and DM? Will the speculator get profit in which location? 14 Marks] P ul. Explain the arbitrage process in detail. [2 Marks]

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