Problem 5.19 Around the Horn Assuming the following quotes, calculate how a market trader at Citibank with $1,000,000 can make an intermarket arbitrage profit.: Citibank quotes U.S. dollar per pound: National Westminster quotes euros per pound: Deutschebank quotes U.S. dollar per euro: $1.5900/ 1.2000/ $0.7550/ Exchange rate 1.5900 Assumptions Citibank quote: US$/pound ($/) National Westminster quote: euros/pound (/) Deutschebank quote: US$/euro ($/) Initial investment 1.2000 0.7550 1,000,000.00 $ Path #1: US$ to euros to pounds to US$ Start with US$ Convert to euros at Deutschebank quote Convert euros to pounds at NatWest quote Convert pounds to US$ at Citibank quote Arbitrage gain (loss) Path #2: US$ to pounds to euros to US$ Start with US$ Convert to pounds at Citibank quote Convert pounds to euros at NatWest quote Convert euros to US$ at Deutschebank quote Arbitrage gain (loss) II Triangular arbitrage path #1 yields a positive profit