1. Given the following three currency quotes given by a Tokyo bank and a London bank:

112.14/$

141.92/

0.7862/$

Please answer parts (a) and (b) in the order they are given.

1. Show whether there is an arbitrage opportunity implied in these three quotes.
2. Starting with a nominal $32 million, show how much arbitrage profit (if any) you can make by trading the currencies at the given rates.