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Question: A) Assuming triangular arbitrage is not possible and exchange rates...

a) Assuming triangular arbitrage is not possible and exchange rates are priced efficiently, use the following quotes to determine the percentage change in the NZD against the JPY.

	Today	1 year ago
AUD NZD	1.0362	1.0965
AUD JPY	71.85	74.65

(5 marks)

b) You have the following quotes from three different banks:

Big Time Bank	71.85 JPY AUD
Fack Bank	0.9601 AUD NZD
Trusty Bank	69.99 JPY NZD

If you can buy or sell at the given quotes, how much profit can you make using AUD $1 000 000. Clearly show each of your trades and give your profit in AUD. (10 marks)