Question
The following are from the Wall Street Journal Market Data website on February 8, 2021: S($/C$) = $.7842/C$ S(C$/ ) = C$1.5362/ S($/ )
The following are from the Wall Street Journal Market Data website on February 8, 2021: S($/C$) = $.7842/C$ S(C$/ ) = C$1.5362/ S($/ ) = $1.2407/ a.) Does mispricing exists in the foreign exchange market? b.) If yes, what currency is overvalued? What currency is undervalued? c.) If yes, develop a plan, utilizing triangular arbitrage, to profit from the cross exchange rates.
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