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he following are New York closing rates for C$/US$ and SFr/US$: C$/$ = 1.3450; SFr/$ = 0.9750 (a) Calculate the cross rate for C$ in
he following are New York closing rates for C$/US$ and SFr/US$: C$/$ = 1.3450; SFr/$ = 0.9750
(a) Calculate the cross rate for C$ in terms of SFr (SFr/C$).
(b) If the C$ was trading at SF0.7300 in Zurich at the same time, was there an arbitrage opportunity? If so, show how arbitrageurs with C$ could have profited from this opportunity and calculate the arbitrage profits in C$ and in percent. (15 points)
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