1. The first arbitrage opportunity relates to locational arbitrage. Holt has obtained spot rate quotations from two banks in Thailand, Minzu Bank and Sobat Bank, both located in Bangkok. The bid and ask prices of Thai baht for each bank are displayed in the table below:

	Minzu Bank	Sobat Bank
Bid	$0.0224	$0.0228
Ask	$0.0227	$0.0229

Determine whether the foreign exchange quotations are appropriate. If they are not appropriate, determine the profit you could generate by withdrawing $100,000 from Blades’ checking account and engaging in arbitrage before the rates are adjusted.

2. Besides the bid and ask quotes for the Thai baht provided in the previous question, Minzu Bank has provided the following quotations for the U.S. dollar and the Japanese yen:

	Quoted Bid Price	Quoted Ask Price
Value of a Japanese yen in U.S. dollars	$0.0085	$0.0086
Value of a Thai baht in Japanese yen	¥2.69	¥2.70

Determine whether the cross exchange rate between the Thai baht and Japanese yen is appropriate. If it is not appropriate, determine the profit you could generate for Blades Inc, by withdrawing $100,000 from Blades’ checking account and engaging in triangular arbitrage before the rates are adjusted.

3.