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14. Suppose that a quote for the dollar spot exchange rate of Danish kroner (symbol DKr or code DKK) is DKr8.25 per dollar, and a
14. Suppose that a quote for the dollar spot exchange rate of Danish kroner (symbol DKr or code DKK) is DKr8.25 per dollar, and a quote for the dollar spot exchange rate of Swiss Franc is SFr1.65 per dollar. a. What should be the quote for the SFr:DKr cross rate so that there are no arbitrage opportunities (ignore transaction costs)? b. Suppose a bank is offering a quote for the SFr:DKr cross rate as DKr5.20 per SFr. In this quote, which currency is overvalued with respect to the other
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