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Suppose that the yen is pegged to gold at 4 , 0 0 0 per ounce and the dollar is pegged to gold at $
Suppose that the yen is pegged to gold at per ounce and the dollar is pegged to gold at $ per
ounce.
a What is the implied exchange rate between the yen and the dollar JPYUSD
b If the current market exchange rate is and you have $ describe how you would take
advantage of this situation in steps and compute your arbitrage profit. Ignore any transaction cost.
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