Question: Practice problems for Module 3 1. Quotes for one U.K. pound: NY London Bid price $1.59 $1.63 Ask price $1.60 $1.64 a. What is the

Practice problems for Module 3 1. Quotes for one U.K. pound: NY London Bid price $1.59 $1.63 Ask price $1.60 $1.64 a. What is the net profit from the locational arbitrage, if you have $1,600 to invest? .03 per UK pound b. Which price will increase after the locational arbitrage? Ask price due to high demand in NY exchange C. Which price will decrease after the locational arbitrage? Bid price due to large sales in London exchange 2. Value of pound in $ $1.61 Value of MYR in $ $0.20 Value of pound in MYR MYR8.10 a. Which currency is overpriced? I b. What is the net profit from the triangular arbitrage, if you have $10,000 to invest? c. Which price(s) will increase after the triangular arbitrage? d. Which price(s) will decrease after the triangular arbitrage

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