The New Zealand dollar and U.S. dollar S($/NZD) spot exchange rate is 0.6717. The Japanese yen and U.S. dollar S(¥/$) spot exchange rate is 120.12. If market is quoting the Japanese yen and New Zealand dollar S(¥/NZD) spot exchange rate at 78.89, determine if there is any triangular arbitrage. How much can you profit (in US dollar) if you can borrow up to $1,000,000. Be sure to answer the following questions:
(1) What is the cross-exchange rate between yen and NZD, S(¥/NZD)?
(2) If there is arbitrage opportunity, state clearly each step necessary to capture the profit.
(3) How much is the arbitrage profit in US dollar?