Question
The current EUR/USD spot quotes are 1.3050/60 and 0.8162/75 respectively. 1. Suppose you have 1,000,000 CAD and the EUR/CAD is currently quoted by a Canadian
The current EUR/USD spot quotes are 1.3050/60 and 0.8162/75 respectively.
1. Suppose you have 1,000,000 CAD and the EUR/CAD is currently quoted by a Canadian bank 1.5950/60. Is there any arbitrage opportunity. Explain and show the eventual steps to make the arbitrage profit and calculate the realized amount.
2.Suppose another Canadian Bank quote the EUR/CAD 1.6000/10. Is there any arbitrage opportunity. Explain and show the eventual steps to make the arbitrage profit and calculate the realized amount.
Use market and cross rates to solve.
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Finance
Authors: Angelico Groppelli, Ehsan Nikbakht
7th Edition
1438010362, 9781438010366
