Question
2. Assume the following information: Quoted Price Value of Canadian dollar in U.S. dollars $.90 Value of New Zealand dollar in U.S. dollars $.30 a.
2. Assume the following information:
Quoted Price
Value of Canadian dollar in U.S. dollars $.90
Value of New Zealand dollar in U.S. dollars $.30
a. What is the cross rate between Canadian dollars and New Zealand dollars.
b. Suppose the Canadian dollar is valued at NZ$ 3.05. If you have $1 million, show the profit that you can earn from this mispricing.
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International Financial Management
Authors: Jeff Madura
3rd Edition
0314862722, 978-0314862723
