Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Travelex Australia provides the following three exchange rates. You assume that there is a triangular arbitrage profit opportunity exists based on the following three quotations.

Travelex Australia provides the following three exchange rates. You assume that there is a triangular arbitrage profit opportunity exists based on the following three quotations. Calculate the arbitrage profit if you have A$1.47 million or MYR2.30 million or CNY3.22 million. (enter the whole number without sing or symbol).

Exchange rates

bid price

ask price

Value of a Chinese yuan (CNY) in Australian dollars (A$)

A$0.2061

A$0.2273

Value of a Malaysian ringgit (MYR) in Australian dollars (A$)

A$0.3067

A$0.3256

Value of a Malaysian ringgit (MYR) in Chinese yuan (CNY)

CNY1.7094

CNY1.9794

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Introduction To Institutions Investments And Management

Authors: Ronald W. Melicher, Edgar A. Norton

12th Edition

0471675792, 9780471675792

More Books

Students also viewed these Finance questions