1. Take the following two exchange rates and compute the INR/EUR cross exchange rate. INR12.15/USD and USD1.13/EUR

2. In question 1, if there is a direct cross exchange rate of INR 13.94/ EUR, is there a triangular arbitrage opportunity? If yes, start with $50,000 and indicate how much triangular arbitrage profit exists for 1 trip around the triangle.

3. In thinking about the indirect €/£ bid price, which diagram is appropriate?

A) £ -- $ -- €

B) $ -- £ -- €

C) € -- $ -- £

D) € -- £ -- $

4. In thinking about the indirect €/£ ask price, which diagram is appropriate?

A) £ -- $ -- €

B) $ -- £ -- €

C) € -- $ -- £

D) £ -- € -- $