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Assume the following information: Quoted Price Value of Canadian dollar in U.S. dollars $0.90 Value of New Zealand dollar in U.S. dollars $0.30 Value of Canadian dollar in New Zealand dollars NZ$3.02 Explain the steps that would reflect triangular arbitrage. I. One could obtain Canadian dollars with U.S. dollars, sell the Canadian dollars for New Zealand dollars and then exchange New Zealand dollars for U.S. dollars. II. One could obtain U.S. dollars with Canadian dollars, sell the U.S. dollars for New Zealand dollars and then exchange New Zealand dollars for Canadian dollars. III. One could obtain New Zealand dollars with U.S. dollars, sell the New Zealand dollars for Canadian dollars and then exchange Canadian dollars for U.S. dollars. -Select- v Compute the profit from this strategy if you had $2 million to use. Do not round intermediate calculations. Round your answer to the nearest dollar. What market forces would occur to eliminate any further possibilities of triangular arbitrage? I. The value of the Canadian dollar with respect to the U.S. dollar would rise. The value of the Canadian dollar with respect to the New Zealand dollar would rise. The value of the New Zealand dollar with respect to the U.S. dollar would fall. II. The value of the Canadian dollar with respect to the U.S. dollar would rise. The value of the Canadian dollar with respect to the New Zealand dollar would decline. The value of the New Zealand dollar with respect to the U.S. dollar would fall. III. The value of the New Zeland dollars with respect to the U.S. dollar would rise. The value of the Canadian dollar with respect to the New Zeland dollar would rise. The value of the Canadian dollar with respect to the U.S. dollar would fall. -Select- v

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