Question
The Nigerian nira versus the US dollar is 7 to 1, i.e., 7 nira buy one dollar. The ER between the Swiss franc and the
The Nigerian nira versus the US dollar is 7 to 1, i.e., 7 nira buy one dollar. The ER between the Swiss franc and the US dollar is one to one. Finally, the nira trades 7.02 per one Swiss franc. What kind of triangular arbitrage will induce a profit for you? Assume you start with $1 million.
After I solved this problem I found this arbritage can give you a profit of $28,571. How does this problem relate to Interest parity theory?
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Smith and Roberson Business Law
Authors: Richard A. Mann, Barry S. Roberts
15th Edition
978-0538473637
