Q3, Q4 and Q5 are linked.

Q3: The following rates are being quoted in the spot exchange rate market by a bank, involving South African Rand (SAR), Australian dollars (AUD) and US dollars (USD). The rates are quoted as the number of SAR per USD, the number of AUD per USD and the number of SAR per AUD.

The bank's spot exchange rates (bid -- ask) are: SAR/USD = 19.1400 -- 19.1500 AUD/USD = 1.5600 -- 1.5605 SAR/AUD = 12.2450 -- 12.2500.

You work for a hedge fund, Virginia Capital, as a trader and your boss says that you can use 10 mio USD as risk capital to do trades in the above rates. How many USD arbitrage profit can you make -- in other words, how much guaranteed risk-free profit can you make starting with 10 mio USD. Give your answer in USD to the nearest USD. If there is no arbitrage, enter zero. As usual, do your calculations in Excel and do NOT round until the very end.

Q4: This question is linked to Q3. The only difference is that (instead of the above) the spot exchange rate for the number of SAR per AUD is being quoted as SAR/AUD = 12.2750 -- 12.2800. Repeat the calculation that was performed for Q3. Again, you can use 10 mio USD as risk capital to do trades. How many USD arbitrage profit can you make? Give your answer in USD to the nearest USD. If there is no arbitrage, enter zero

Q5: This question is linked to Q3 and Q4. The only difference is that (instead of the above) the spot exchange rate for the number of SAR per AUD is being quoted as SAR/AUD = 12.2610 -- 12.2660. Repeat the calculation that was performed for Q3 and Q4. Again, you can use 10 mio USD as risk capital to do trades. How many USD arbitrage profit can you make? Give your answer in USD to the nearest USD. If there is no arbitrage, enter zero.