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Problem 2 You observe the following quotes (these are spot rates) for the pound () and the Zim dollar (Z$): Bid $1.234/ Ask $1.239/
Problem 2 You observe the following quotes (these are spot rates) for the pound () and the Zim dollar (Z$): Bid $1.234/ Ask $1.239/ $0.045/Z$ $0.047/Z$ a. What is the implied ZS/ cross-quote? b. If the actual ZS/ is: 23.52-23.55, is arbitrage possible? c. If there is arbitrage opportunity, what is the profit from triangular arbitrage if you have $1,000,000?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
