Question: Problem 1: Arbitrage through Currency Exchange. (10 points) Following figure shows the currency exchange rates among US Dollars (USD), British Pound (GBP), and Swiss Franc

Problem 1: Arbitrage through Currency Exchange.

Problem 1: Arbitrage through Currency Exchange. (10 points) Following figure shows the currency exchange rates among US Dollars (USD), British Pound (GBP), and Swiss Franc (CHF). For example, 1 GBP 1.3 USD. We would like to model this as a network problem to find if there is an arbitrage opportunity in USD. 1.3 USD GBP 0.77 1.1 1.19 0.91 0.84 CHE 3 a) Write the Mathematical formulation of this network problem. b) Create a spreadsheet model, and solve it using Solver. Problem 1: Arbitrage through Currency Exchange. (10 points) Following figure shows the currency exchange rates among US Dollars (USD), British Pound (GBP), and Swiss Franc (CHF). For example, 1 GBP 1.3 USD. We would like to model this as a network problem to find if there is an arbitrage opportunity in USD. 1.3 USD GBP 0.77 1.1 1.19 0.91 0.84 CHE 3 a) Write the Mathematical formulation of this network problem. b) Create a spreadsheet model, and solve it using Solver

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