1. Assume that the following spot exchange rates exist today: 1 = $1.50 C$=$.75 1 = CS2 Assume no transaction costs. Based on these
1. Assume that the following spot exchange rates exist today: 1 = $1.50 C$=$.75 1 = CS2 Assume no transaction costs. Based on these exchange rates, can triangular arbitrage be used to earn a profit? Explain. 2. Assume the following information: Spot rate of $1.60 180-day forward rate of = $1.56 180-day British interest rate = $4% 180-day U.S interest rate = $3% Based on this information, is covered interest arbitrage by U.S. investors feasible (assuming that U.S. investors use their own funds)? Explain.
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1 When exchange rate of three currencies dont match a discrepancy occurs between three currencies so ...
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Authors: Eric Chiang
3rd edition
978-1429278478, 1429278471, 978-1429278492, 1429278498, 1464191433, 978-1464191435
