QUESTION $11$

a$)$ Hiro has $$10,000$ to invest in the foreign$-$exchange market, with a focus on U$.$S$.$ dollars $($USD$),$ euros

$($EUR$),$ and Japanese yen $($JPY$).$ Calculate the potential arbitrage profit or loss Hiro could realize from

the following sequence: USD to EUR, EUR to JPY$,$ and JPY back to USD.

b$)$ Assess Hiro's arbitrage profit or loss from converting USD to JPY$,$ then JPY to EUR, and finally EUR

back to USD.

c$)$ Examine the current exchange rates between the USD, EUR, and JPY to determine if there are any

arbitrage opportunities available with these currencies.