The question only involves the commodities of AUD/USD

The firms senior management has taken note of your expertise in arbitrage trading. You have been asked to identify potential arbitrage opportunities based on the differences in exchange rates in table 4 and 5. Suppose that the actual forward rates for the end of October 2020 are as follows:

Inform the company whether the commodity currencies listed in Table 5 are over-, under-, or fairly valued compared to the implied forward rates estimated in Table 4 , and what is your suggested strategy to the top management (buy or sell the commodity currency)? If there is any arbitrage opportunity available between the implied forward rates estimated in Table 4 and the actual forward rates listed in Table 5, how much profit can you generate for the company as a price taker with 50,000,000 units of currency (choose the most profitable option) . To minimise the transaction costs involved you can only exploit arbitrage opportunities between two exchange rates (i.e., NO TRIANGULAR ARBITRAGE OPPORTUNITY ALLOWED). Finally, you must convert profit, if any, to AUD using the mid rates estimated in Table 4.

Updated*

Comm / Terms Bid Ask Mid AUD/USD 0.716229 0.71643 0.7163295 AUD/EUR 0.606311 0.606711 0.606511 EUR/AUD 1.648699 1.648999 1.648849 AUD/GBP 0.54698 0.54728 0.54713 GBP/AUD 1.827566 1.828066 1.827816 AUD/JPY 75.73083 75.76082 75.745825 EUR/USD 1.180858 1.181259 1.1810585 GBP/USD 1.308984 1.309484 1.309234 USD/JPY 105.7341 105.7641 105.7491 EUR/GBP 0.901842 0.902342 0.902092 EUR/JPY 124.8795 124.9195 124.8995 GBP/JPY 138.42 138.47 138.445 AUD/CAD 0.943285 0.944085 0.943685 EUR/CHF 1.07456 1.075459 1.075005 GBP/CHF 1.191298 1.92197 1.556634 USD/CHF 0.910079 0.910278 0.9101785 USD/CAD 1.317381 1.317781 1.317581 NZD/USD 0.65383 0.65413 0.65398 Table 4. Implied forward rates at the end of October 2020 Mid rate = (bid rate task rate)/2 Comm / Terms Bid Ask Opinion (over/under/ fairly valued) Suggested Strategy AUD/CAD 0.9447 0.9455 GBP/USD 1.3100 1.3105 NZD/USD 0.6510 0.6513 Table 5: Actual forward FX rates for the end of October 2020. 2-Month Benchmark Rates 0.095 0.073 0.150 -0.495 Currency Benchmark Interest Rates AUD 2-Month Bank Bill Swap Rates GBP 2-Month GBP LIBOR CAD 2-Month Treasury Bills EUR 2-Month Euro LIBOR NZD 2-Month Bank Bill Yields CHF 2-Month CHF LIBOR JPY 2-Month JPY LIBOR USD 2-Month USD LIBOR Table 3: Benchmark interest rates on August 22, 2020. 0.270 -0.744 -0.059 0.205 Comm / Terms Bid Ask Mid AUD/USD 0.716229 0.71643 0.7163295 AUD/EUR 0.606311 0.606711 0.606511 EUR/AUD 1.648699 1.648999 1.648849 AUD/GBP 0.54698 0.54728 0.54713 GBP/AUD 1.827566 1.828066 1.827816 AUD/JPY 75.73083 75.76082 75.745825 EUR/USD 1.180858 1.181259 1.1810585 GBP/USD 1.308984 1.309484 1.309234 USD/JPY 105.7341 105.7641 105.7491 EUR/GBP 0.901842 0.902342 0.902092 EUR/JPY 124.8795 124.9195 124.8995 GBP/JPY 138.42 138.47 138.445 AUD/CAD 0.943285 0.944085 0.943685 EUR/CHF 1.07456 1.075459 1.075005 GBP/CHF 1.191298 1.92197 1.556634 USD/CHF 0.910079 0.910278 0.9101785 USD/CAD 1.317381 1.317781 1.317581 NZD/USD 0.65383 0.65413 0.65398 Table 4. Implied forward rates at the end of October 2020 Mid rate = (bid rate task rate)/2 Comm / Terms Bid Ask Opinion (over/under/ fairly valued) Suggested Strategy AUD/CAD 0.9447 0.9455 GBP/USD 1.3100 1.3105 NZD/USD 0.6510 0.6513 Table 5: Actual forward FX rates for the end of October 2020. 2-Month Benchmark Rates 0.095 0.073 0.150 -0.495 Currency Benchmark Interest Rates AUD 2-Month Bank Bill Swap Rates GBP 2-Month GBP LIBOR CAD 2-Month Treasury Bills EUR 2-Month Euro LIBOR NZD 2-Month Bank Bill Yields CHF 2-Month CHF LIBOR JPY 2-Month JPY LIBOR USD 2-Month USD LIBOR Table 3: Benchmark interest rates on August 22, 2020. 0.270 -0.744 -0.059 0.205