Data given by american bank €:$ = S($/€) = 1.2000-1.2050; £:$=S($/£) = 1.7950-1.8000 data by british bank £:€=S(€/£) = 1.5050-1.5070
A) find out the home made cross rates for S(€/£)
B) Are the market cross rates sustainable? If not, what can market do to eliminate market mispricing? Will there be any profit to arbitrageurs,is so how much?