Part I. 1. Given the following two sets of quotations by two currency dealers: Dealer A Dealer B Bid Ask Bid $1.1360/ $1.1590/ $1.1090/ $1.1220/ Ask a. Show without any calculations whether these two sets of quotations are out of equilibrium to a degree that would lead to an arbitrage opportunity in the absence of any transaction costs beyond the bid/ask spread. b. Prove your point by narrating the trading activities that you need to perform and calculating arbitrage profit by starting with a nominal sum of $38 million. 2. Given the following three currency quotes given by a Tokyo bank and a London bank: 112.14/5 141.92/ 0.7862/8 Please answer parts (a) and (b) in the order they are given. Show whether there is an arbitrage opportunity implied in these three quotes b. Starting with a nominal $32 million, show how much arbitrage profit (if any) you can make by trading the currencies at the given rates