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Suppose that the pound is pegged to gold at 2 0 per ounce and the dollar is pegged to gold at $ 3 5 per
Suppose that the pound is pegged to gold at per ounce and the dollar is pegged to gold at $ per ounce. This implies an exchange rate of $ per pound. If the current market exchange rate is $ per pound, there is an arbitrage opportunity by buying gold using currency; then selling gold simultaneously using currency Finally, exchange the currency in the current market.
; GBP; USD
; USD; GBP
; GBP; USD
; USD; GBP
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