Question One a. Suppose the figures below at the foreign exchange trading desk of Goldman Sachs in London of the exchange rates of the euro relative to the pound and the dollar and the dollar relative to the pound: 1.4381/ or 0.6954/ 0.8408/$ or $1.1893/ $1.7395/ or 0.5749/8 Determine, with explanations, the arbitrage profits when the trader starts with 100,000,000 and buys the pound (). Show your answer in a triangle diagram. [10 Marks) b. Assume that the following spot exchange rates exist today: 1.00-US$1.50 C$1.00=US$0.75 1.00-C$2.00 Assume no transaction costs. Based on these exchange rates, can triangular arbitrage be used to earn profits? Explain. 15 Marks]