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Question 8 As a foreign exchange trader, you see the following quotes for Canadian dollars (CAD), US dollars (USD) and Mexican pesos (MXN): CAD1.5/USD 1

Question 8

As a foreign exchange trader, you see the following quotes for Canadian dollars (CAD), US dollars (USD) and Mexican pesos (MXN):

CAD1.5/USD 1

MXN6/CAD 1

MXN4/USD 1

Is there an arbitrage opportunity, and if so, how would you exploit it? Assume that you initially have 1,000 Canadian dollars to invest.

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