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i. ii. As a foreign exchange trader, you observe the following quotes for Tunisian Dinar (TND), South African Rand (ZAR) and U.S. Dollar (USD)

i. ii. As a foreign exchange trader, you observe the following quotes for Tunisian Dinar (TND), South African Rand (ZAR) and U.S. Dollar (USD) today. Assume there are no transaction costs. TND3.25/USD ZAR4.67/TND ZAR14.21/USD Based on the quotes above, can you identify an arbitrage opportunity? If so, show how a currency trader with access to 100,000 U.S. Dollars (USD) can exploit this. What will happen to the three currency pairs above if more arbitrageurs enter the trade?

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