$1.$ As a $$-$based foreign currency trader, you observed the following quotes:

EUR$0\mathrm{.}7627/$USD

CHF$1\mathrm{.}1806/$USD

EUR$0\mathrm{.}6395/$CHF

Summarize the steps you would take to make an arbitrage profit. How much would you profit

if you have $$5,000,000$ available for this purpose? What EUR$/$CHF quote will eliminate the

arbitrage opportunity?

$2.$ Answer the following questions based on the following table:

American Terms European Terms

Bid Ask Bid Ask

New Zealand dollar $($NZD$)\mathrm{.}7265\mathrm{.}72721\mathrm{.}37511\mathrm{.}3765$

Singapore dollar $($SGD$)\mathrm{.}6135\mathrm{.}61401\mathrm{.}62871\mathrm{.}6300$

$(1)$ If a retail customer wants to buy $1$ million USD with NZD$,$ how much NZD he has to pay?

$(2)$ If a retail customer wants to buy SGD with $1$ million USD, how much SGD he will get?

$(3)$ A retail customer plans to sell his holding of equities worth of NZD$1,000,000$ to buy

equities denominated in SGD$.$ How much SGD equity he can buy?

$(4)$ Calculate NZD$/$SGD bid price.

$3.$ Based on the following table, calculate the forward discount $($or forward premium$)$ at which

USD is trading against CHF for a $6-$month delivery. Which currency$($s$)$ is $($are$)$ trading at

forward premium for a delivery in $3$ months? Explain.

USD equivalent Currency per USD

CHF $1\mathrm{.}06970\mathrm{.}9348$

$1-$mos forward $1\mathrm{.}07000\mathrm{.}9346$

$3-$mos forward $1\mathrm{.}07050\mathrm{.}9341$

$6-$mos forward $1\mathrm{.}07150\mathrm{.}9333$

GBP $1\mathrm{.}57330\mathrm{.}6356$

$1-$mos forward $1\mathrm{.}57290\mathrm{.}6358$

$3-$mos forward $1\mathrm{.}57230\mathrm{.}6360$

$6-$mos forward $1\mathrm{.}57130\mathrm{.}6364$