Question
You have $24,000 and observe the following exchange rates: Exchange rate Bid Ask Value of euro in U.S. dollars $1.2 $1.21 Value of Swiss franc
You have $24,000 and observe the following exchange rates:
| Exchange rate | Bid | Ask |
| Value of euro in U.S. dollars | $1.2 | $1.21 |
| Value of Swiss franc in U.S. dollars | $1 | $1.01 |
| Value of euro in Swiss francs | CHF1.15 | CHF1.16 |
Is there an arbitrage opportunity? If so, what should you do to exploit it?
No
Yes: buy euros with Swiss francs
Yes: buy Swiss francs with euros
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Re Imagining Offshore Finance
Authors: Christopher M. Bruner
1st Edition
0190466871, 978-0190466879
