Q.1 Riskless profit on the Swiss franc. The following exchange rates are avaliable to you.(you can buy or ssell at the started rates.)

Mt Fuji Bank 120.00/A$

Mt Rushmore Bank SF1.6000/A$

Mt Blanc Bank 80.00/SF

Assume that you have an initial SF 10,000,000. Can you make a profit via triangular arbitrage? If so, show steps and calculate the amount of profit in Swiss francs.

Q.2 Australian-euro arbitrage. A corporate treasury with operations in Sydney simultaneously calls Westpac Bank in Sydney and Barclays in London. The two banks give the following quotes at the same time on euro:

Westpac Sydney: A$1.1840-60/ Barclays London A$1.1830-50/

Expain, using 1 million or its euro equivalent, how the corporate treasury could make geographical arbitrage profit with the two exchange rate quotes.