The New York spot exchange rate for the British pound (GBP/USD) is 1.3436 and the spot exchange rate for the Australian dollar (AUD/USD) is 0.7576.
Using the New York market spot exchange rates if, in London, the exchange rate for the Australian dollar is 1.7749, what trades should you make to take advantage of the arbitrage opportunity? For each transaction, be specific about where the trade takes place, which currency you would purchase (or sell) and which currency you would use to pay (or receive)
How profitable is a round trip trade? State the profitability either in percent or basis points.