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The table below presents quotes and cross-quotes on GBP and EUR. Price for GBP in Chicago (USD/GBP) 1 GBP = USD 1.45 Price for EUR
The table below presents quotes and cross-quotes on GBP and EUR. Price for GBP in Chicago (USD/GBP) 1 GBP = USD 1.45 Price for EUR in New York (USD/EUR) 1 EUR = USD 1.15 Price for EUR in London (GBP/EUR) 1 EUR = GBP 0.7852 If all traders use triangular arbitrage to maximize profits, then USD/GBP for the Chicago dealer will and USD/EUR for the New York dealer will GBP/EUR for the London dealer will decrease; decrease; increase decrease; increase; increase increase: decrease; decrease increase; increase; decrease
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Financial Management And Policy
Authors: James C. Van Horne
12th Edition
0130326577, 9780130326577
