The cross rates for the three major currencies in the world are shown in the table below:

	U.S. dollar	Euro	Japanese yen
U.S. dollar	1	1.0857	117.22
Euro	0.9211	1	105.50
Japanese yen	0.008531	0.009479	1

a) Assuming that there are no transaction costs, are there any arbitrage opportunities? Give your explanation.

b) If you did not have any short-selling restrictions, how could you make profits from such exchange rates, if at all? (In case there is an opportunity for triangular arbitrage, describe how you would buy and sell these currencies to make extraordinary profits).

c) When participating in such arbitrage opportunities, what is the main source of transaction costs that you should consider?