Assume that 1 = $0.0077 in New York, $1 = SKr2.00 in London, and SKr1 = 65

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Assume that ¥1 = $0.0077 in New York, $1 = SKr2.00 in London, and SKr1 = ¥65 in Tokyo.

(a) If you have ¥10,000 on hand, how could you use a triangle arbitrage to earn a profit?

(b) If you ignore transaction costs, what is the arbitrage profit per yen initially traded?

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Global Corporate Finance Text And Cases

ISBN: 9781405119900

6th Edition

Authors: Suk H. Kim, Seung H. Kim

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Question Posted: Sep 19, 2024 02:28 PM

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Assume that 1 = $0.0077 in New York, $1 = SKr2.00 in London, and SKr1 = 65 in Tokyo. (a) If you have 10,000 on hand, how could you use a triangle arbitrage to earn a profit? (b) If you ignore...
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Assume that 1 = $0.0077 in New York, $1 = SKr2.00 in London, and SKr1 = 65

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Global Corporate Finance Text And Cases

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