Question
A Tokyo bank offers to sell euros at 129.10 yen per euro and buy 129.10 yen per euro. A Berlin bank offers to sell pounds
A Tokyo bank offers to sell euros at 129.10 yen per euro and buy 129.10 yen per euro. A Berlin bank offers to sell pounds at 1.6279 euros per pound and buy pounds at 1.6279 euros per pound. A London bank offers to sell pounds at 206.74 yen per pound and buy pounds at 206.74 yen per pound. Starting with 100,000 euros, determine some way to make a profit.
1. What will be your profit in euros?
2. Along the way in the above transactions, you had to momentarily hold pounds. How many pounds did you hold?
3. Along the way in the above transactions, you had to momentarily hold yen. How many yen did you hold?
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