see the following dealer quotes for the euro in the New York spot market: The bid is $1.30 and the ask is $1.31. The dealer quotes for the euro in the Frankfurt spot market are the following: The bid is $1.28 and the ask is $1.29. Given these quotes, which of the following strategies would you employ to profit from an arbitrage opportunity?

a) Simultaneously buy euro in New York and sell euro in Frankfurt

b) Simultaneously buy euro in Frankfurt and sell euro in New York

c) Buy euro in Frankfurt and wait for euro to appreciate in Frankfurt before selling euro

d) Sell euro in New York and wait for euro to depreciate in New York before buying euro

National Bank quotes the following for the British pound and the Euro:

Quoted Bid Price Quoted Ask Price

Value of a British pound () in $ $1.5267 $1.5272

Value of a euro in $ $.9761 $.9766

Value of a euro in British pounds 0.6511 0.6541

Observe that triangular arbitrage may be accomplished if one buys euro with dollars, sells euro to get British pounds, and sells British pounds to get dollars. Which of the following will result from trading in response to this arbitrage opportunity?

a)The quoted ask price for the euro in dollars increases, the quoted ask price for the euro in British pounds decreases, and the quoted ask price for the British pound in dollars decreases.

b) The quoted bid price for the euro in dollars increases, the quoted bid price for the euro in British pounds decreases, and the quoted bid price for the British pound in dollars decreases.

c) The quoted bid price for the euro in dollars increases, the quoted ask price for the euro in British pounds decreases, and the quoted ask price for the British pound in dollars decreases.

d) The quoted ask price for the euro in dollars increases, the quoted bid price for the euro in British pounds decreases, and the quoted bid price for the British pound in dollars decreases.