The quotes for U.S$, and are as follows: Assume you have US $1 million to invest. $/ = 0.60 /$ = 0.8 / = 1.7
The quotes for U.S$, and are as follows: Assume you have US $1 million to invest.
$/ = 0.60
/$ = 0.8
/ = 1.7
1) What is the implied cross-rate?
2) Is there an arbitrage opportunity? If yes, what is the potential arbitrage profit?
3) Can this opportunity be sustained over the long-term? Why, or why not?
Thank you!
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Authors: Louis C. Gapenski
2nd Edition
1567931650, 978-1567931655
