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Consider the following three exchange rate quotes, given by three dealers A, B, and C....

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Consider the following three exchange rate quotes, given by three dealers A, B, and C. A. US$1.25 - 1.0 B. US$0.8 = C$1.0 C. C$1.5 = 0.8 Where US$ is the American dollar, C$ is the Canadian dollar, and is the pound sterling (1) Assume no brokerage commission in any of the transactions and show profit from triangular arbitrage of a transaction size of C$100 million. (6 marks) (ii) Indicate market forces that will eliminate the triangular arbitrage opportunity

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