Question: Problem 1 ( 4 points) 1 . As an employee of the foreign exchange department for a large company , you have been given the

Problem 1 ( 4 points) 1 . As an employee of

Problem 1 ( 4 points) 1 . As an employee of the foreign exchange department for a large company , you have been given the following information . Beginning of Year Spot rate of $ = $1.596 Spot rate of Australian dollar ( $ $ ) = $.70 Cross exchange rate : $1 = A$2. 28 One - year forward rate of A$ = $. 71 One - year forward rate of $ = $1. 58004 One - year U. S. interest rate = 8.00%' One - year British interest rate = 9.09 9/0 One - year Australian interest rate = 7.00 %/0 Determine whether triangular arbitrage is feasible , and if so , how it should be conducted to make a profit . ( 1 point )

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