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PAA E L Le Duce Date Date Emphasis Heading 1 Heading 2 Heading Thea Parageph Question No 5: (A) As you know that Arbitrageurs are
PAA E L Le Duce Date Date Emphasis Heading 1 Heading 2 Heading Thea Parageph Question No 5: (A) As you know that Arbitrageurs are the people who seek to earn risk less profits by taking advantage of differences in exchange rates among two markets. Assume the exchange rates quoted by the forex dealers for AUD/USD in Sidney and New York markets are as follows: Sidney Market New York Market AUD 1.42123/USD AUD 1.41167/USD Mr. Salim is an international trader would like to do an arbitrage transaction to get some profit. Requirement: 0 How can Mr. Salim do arbitrage transaction to get profit and how much profit he will get? (Assume Mr. Salim will buy and sell USD 100,000). () If the transaction cost is 1% on amount paid and received in AUD, will be get real profit? I yes, how much? (4 Marks)
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