Use Figure 30.1 to answer the following questions: (a) What is the cross-rate in terms of Rwandan

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Use Figure 30.1 to answer the following questions:

(a) What is the cross-rate in terms of Rwandan franc per Thai baht?

(b) Suppose the cross-rate is 12 Rwandan franc = 1 Thai baht. Is there an arbitrage opportunity here? If there is, explain how to take advantage of the mispricing.

Figure 30.1

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Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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