The foreign exchange quotes are given by: Braggart Bank Thrifty Bank 125.75/5 125.50/$ - If we assume no transaction costs, there is evidently an opportunity for arbitrage here: - If an arbitrageur started with $10,000, outline exactly how would she make a profit and how much profit would she make, both in dollars and as a rate of return? As many traders engage in arbitrage how do you expect the above quotes at these two banks will adjust? - If there is a 10-basis-points transaction cost for each exchange, is there still an opportunity for arbitrage