The following spot exchange rates are quoted by Barclays, Bank of America, and HSBC: Spot Exchange Rates Bid Ask 1. Barclays: (Thb / Usd) 33.40 35.60 2. Bank of America: (Eur / Usd) 0.70 0.80 3. HSBC: (Thb / Eur) 51.20 52.20 Note: Thb = Thai Baht; Usd = U.S. dollar ($); and Eur = Euro ().

(a) Identify the most valuable arbitrage opportunity as a Thai investor and calculate the riskless profit if Thb4,000,000 were invested in this opportunity. Demonstrate the arbitrage procedure. Show all relevant calculations. [13]

(b) Identify the most valuable arbitrage opportunity as a U.S. investor and calculate the riskless profit if $500,000 were invested in this opportunity. Demonstrate the arbitrage procedure. Show all relevant calculations. [12]