1. Suppose Air France receives the following indirect quotes in New York: €0.92 - 3 and £ 0.63 - 4. Given these quotes, what range of £/€ bid and ask quotes in Paris will permit arbitrage?
2. On checking the Telerate screen, you see the following exchange rate and interest rate quotes:
a. Can you find an arbitrage opportunity?
b. What steps must you take to capitalize on it?
c. What is the profit per $1 million arbitraged?