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Suppose you see the following exchange rate quotes: In New York: $1.25780-89/ In Frankfurt: $1.12634-40/ In London: 1.11685-89/ a)Is there an arbitrage opportunity? Explain. (2

Suppose you see the following exchange rate quotes:

In New York: $1.25780-89/

In Frankfurt: $1.12634-40/

In London: 1.11685-89/

a)Is there an arbitrage opportunity? Explain. (2 marks)

b) If there is an arbitrage opportunity, what is the profit per 1,000 arbitraged? (4 marks)

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