Part a question 2 .... it has to be done with triangular arbitrage so if you could put the triangle in that would be great .... thank you

No need for the theory

SEMESTER 2 EXAMINATION-SUMMER 2017 INTERNATIONAL FINANCE PART A (60 %) Answer three questions. Your answer should be no more than two pages long. Use the data in the table below for the first three questions. 90-day 26-22 180-da 42-35 25-38 British pounds 60.8163-68 1. What is the spot currency market? What is the 90-day currency market? Find the percentage bid ask spread 2. Explain the concept of arbitrage. If the Sfr/E spot rate is quoted as 1.4028/38, is there an arbitrage 3. Explain the concepts of covered and uncovered interest rate parity. If the 90-day annualised interest rate is 4. Why are exchange rates volatile? Discuss strategies for forecasting exchange rates for the above quotes. Where is it the largest and why? opportunity when you compare this to the above rates? On 1.000,000 transaction how much could you make? 3.5-4% in the Euro area and 2.3-2.8% in the sterling area, does covered interest rate parity hold