Suppose that at a point in time, Barclays bank was quoting a dollars per pound exchange rate of $ 1 4570 Industrial bank was quoting a Japanese yen per dollar exchange rate of $ 128 17, and Midland bank was quoting a Japanese yen per pound cross rate of 183 a Ignoring bid ask spreads, was there an ...

The implicit cross rate between yen and pound is 12817 14570 18674 However Midland Bank ...

Suppose that at a point in time, Barclays bank was quoting a dollars per pound exchange rate

Question:

Suppose that at a point in time, Barclays bank was quoting a dollars per pound of £:$ = 1.4570. Industrial bank was quoting a Japanese yen per dollar of $:¥ = 128.17, and Midland bank was quoting a Japanese yen per pound cross rate of £:¥ 183.
a. Ignoring bid-ask spreads, was there an arbitrage opportunity here?
b. If there was an arbitrage opportunity, what steps would you have taken to make an arbitrage profit, and how much would you have profited with $1 million available for this purpose?
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...