Suppose you have $1 million US dollar credit and have access to the following three spot exchange rates:
0.6158 £/$
10.3250 Dkr/£
6.5445 Dkr/$
Dkr: Danish krone
£: UK pound
$: US dollar
a) Is there any (triangular) arbitrage opportunity? How do you detect it?
b) How large is the net profit if triangular arbitrage is applied?