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Question 31 The table below presents quotes and cross-quotes on GBP and EUR. Price for GBP in Price for EUR in New Price for EUR
Question 31 The table below presents quotes and cross-quotes on GBP and EUR. Price for GBP in Price for EUR in New Price for EUR in Chicago (USD/GBP) York (USD/EUR) London (GBP/EUR) 1 GBPUSD 1.45 1 EUR - USD 1.15 1 EUR GBP 0.7852 If a trader has access to $5,000,000, calculate the maximum profit in one triangular arbitrage transaction. $1,886,385 $5,618,687 $106,060 $50,328 Question 32 1 The table below presents quotes and cross-quotes on GBP and EUR. Price for GBP in Price for EUR in New Price for EUR in Chicago (USD/GBP) York (USD/EUR) London (GBP/EUR) 1 GBP - USD 1.45 1 EUR = USD 1.15 1 EUR - GBP 0.7852 If all traders use triangular arbitrage to maximize profits, then USD/GBP for the Chicago dealer will London dealer will ____, and USD/EUR for the New York dealer will GBP/EUR for the increase; decrease, decrease increase increase; decrease decrease; decrease; increase decrease; increase; increase
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