IN BOTH EXAMPLES ASSUME YOU HAVE 1000 USD.

1. Bank ABZ provides the following information on foreign exchange rates:

Using the above information:

a) Estimate the appropriate bid and ask cross rates.

b) build the appropriate (step by step) arbitrage strategy and indicate your profit. If it is useful, you can draw the image of a triangle and use it to guide your steps.

2. Bank of Asia provides the following information on foreign exchange rates:

Using the above information:

a) Estimate the appropriate bid and ask cross rates.

b) construct the appropriate (step by step) arbitrage strategy and indicate your profit. Clearly show all your work. If it is useful, you can draw the image of a triangle and use it to guide your steps.