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Assume the following information for a bank quoting on spot exchange rates:
Exchange rate of Singapore dollar in U.S.$
=
$) 32
Exchange rate of pound in U.S.$
=
$1) 50
Exchange rate of pound in Singapore dollars
=
S$4) 50
Based on the information given, as you and others perform triangular arbitrage, what should logically happen to the spot exchange rates?
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