Intro You have $23,000 and observe the following exchange rates: Bid Ask $1.11 $1.12 Exchange rate Value of euro in U.S. dollars Value of Swiss franc in U.S. dollars Value of euro in Swiss francs $0.98 $0.99 CHF1.08 CHF1.09 Part 1 | Attempt 1/10 for 9 pts. What is the no-arbitrage value of the euro in Swiss francs (the cross exchange rate)? Use the ask quotes. 2+ decima Submit Part 2 Attempt 3/5 for 8 pts. Is there an arbitrage opportunity? If so, what should you do to exploit it? No Yes: buy euros with Swiss francs Yes: buy Swiss francs with euros Correct Since the quoted cross exchange rate is lower than the no- arbitrage exchange rate, the quote is cheap: you should buy euros with Swiss francs at the quoted exchange rate. Part 3 - Attempt 1/10 for 9 pts. How many Swiss francs do you get from converting your dollars? 0+ decima Submit Part 4 Attempt 1/10 for 9 pts. How many euros do you get from converting your Swiss francs? 0+ decima Submit Part 5 Attempt 1/10 for 9 pts. How many dollars do you get from converting your euros? 0+ decima Submit Part 6 Attempt 1/10 for 9 pts. What is your profit from exploiting the opportunity once (in $)? 0+ decima Submit