Question: (Step 2 of triangular arbitrage) You are a U.S.-based treasurer with $1,000,000 to invest. The dollar- euro exchange rate is quoted as $1.205 - 1.00

(Step 2 of triangular arbitrage) You are a U.S.-based treasurer with $1,000,000 to invest. The dollar- euro exchange rate is quoted as $1.205 - 1.00 and the dollar-pound exchange rate is quoted at $1.185 - 1.00. If a bank quotes you a cross rate of 1.00 - 1.010, you should Sell GBP () and buy Euc) O Sell GBP () and buy USD ($) O Sell Euro () to buy GBP () Sell USD ($) and buy Euro ()

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