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You are a U.S.-based investor with $2,500,000 to invest. The dollar-euro exchange rate is quoted as $1.50/ and the dollar-pound exchange rate is quoted
You are a U.S.-based investor with $2,500,000 to invest. The dollar-euro exchange rate is quoted as $1.50/ and the dollar-pound exchange rate is quoted at $2.00/. If a bank quotes you a cross rate of 1.25/, demonstrate if you can make money via triangular arbitrage. Explain all steps in detail and show computations.
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The question relates to foreign exchange If we invest 2500000 in Euro and then Pound and ...
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
