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The following spot quotes were available in London, New York and Frankfurt London: GB0.6791/1 New York: US$1.74368/1 GB Frankfurt: 0.84274/1 US$ Required: a)Based on the

The following spot quotes were available in London, New York and Frankfurt

London: GB0.6791/1

New York: US$1.74368/1 GB

Frankfurt: 0.84274/1 US$

Required:

a)Based on the given information, clearly show with supporting computations, if there is any arbitrage opportunity.

b)Show with supporting explanations and computations, how you can exploit any arbitrage opportunity observed in if an investor has 1,000,000 unit of starting currency.

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