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Suppose the pound is pegged to gold at GBP4 per ounce in the UK, while the dollar is pegged at USD 5 per ounce in
- Suppose the pound is pegged to gold at GBP4 per ounce in the UK, while the dollar is pegged at USD 5 per ounce in the US. The current exchange rate is 1.5 USD/GBP. The shipping costs are GBP2 per ounce between the US and the UK. Is there an arbitrage opportunity and if so, how would you take advantage of it?
| A. | Yes, buy gold in the UK and sell gold in the US | |
| B. | Yes, buy gold in the US and sell gold in the UK | |
| C. | No, there is no arbitrage opportunity | |
| D. | None of the above |
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Future Trading Navigating The Cryptocurrency Futures Trading Landscape Opportunities Challenges And Strategies
Authors: Yun Jin Xu
1st Edition
979-8867102340
