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LO 1 5. Cross-Rates and Arbitrage Suppose the Japanese yen exchange rate is 119 $1 and the British pound exchange rate is 1 = $1.39.

LO 1 5. Cross-Rates and Arbitrage Suppose the Japanese yen exchange rate is 119 $1 and the British pound exchange rate is 1 = $1.39. What is the cross-rate in terms of yen per pound? a. b. Suppose the cross-rate is 168 = 1. Is there an arbitrage opportunity here? If there is, explain how to take advantage of the mispricing

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