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You are a U.S.-based investor with $2,500,000 to invest. The dollar-euro exchange rate is quoted as $1.50/ and the dollar- pound exchange rate is quoted

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You are a U.S.-based investor with $2,500,000 to invest. The dollar-euro exchange rate is quoted as $1.50/ and the dollar- pound exchange rate is quoted at $2.00/. If a bank quotes you a cross rate of 1.25/, demonstrate if you can make money via triangular arbitrage. Explain all steps in detail and show computations. 1 x A FI TE B 1 x

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