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The dollar-euro exchange rate is quoted as $1.60/euro, the dollar-pound exchange rate is quoted at $2.00/pound, and the euro-pound exchange rate is quoted as 1.15
"The dollar-euro exchange rate is quoted as $1.60/euro, the dollar-pound exchange rate is quoted at $2.00/pound, and the euro-pound exchange rate is quoted as 1.15 euro/pound. Which of the following strategies will enable to earn arbitrage profit?"
| There is no arbitrage opportunity. | ||
| "Start with dollars, exchange for euros, exchange for pounds, exchange for dollars. " | ||
| "Start with pounds, exchange for euros, exchange for dollars, exchange for pounds." | ||
| "Start with euros, exchange for dollars, exchange for pounds, exchange for euros." |
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