Please answer and show work. The answers are given in ( ) at the end of both questions.

l. The following exchange rates are available to you Fuji Bank Y92.00/$ Rushmore Bank SFr 1.02/S Blanc Bank N90.00/SFr Assume you have an initial sFr12,000,000. Show the steps to make a profit via triangular arbitrage and calculate the amount of profit in Swiss francs (SFr26,143.79) 2. Casper Landsten is a foreign exchange trader for a bank in New York. He wants to invest $1 million or its Swiss franc equivalent for a short-term money market investment. He observes the following quotes: SFr 1.2810/$ spot exchange rate 3-month forward rate SFr 2740/S U.S. dollar 3-month interest rate 4.8% p.a. Swiss franc e-month interest rate 3.2% p.a. Show the steps Landsten has to take to earn covered interest arbitrage. How much will be the profit? ($1,538.46)