Assume US dollars and Canadian dollars are at 1$US = C$1.08. You have C$1,000,000 at your disposal. What would you do? Note that the sell rate for Canadian dollars is 483 pesos. USD - CAD Exchange rate: 1.3161.
CAD - USD Exchange rate: 0.7598

Chilean Pesos from Forex Kiosk to exchange:

US Dollar . Buy(529) , Sell (527)

CAD . Buy (470), Sell (467)

Brazil Real . Buy (200), Sell (223)

In the left column, you have the buy rate. In the right column, you have the sell rate. In other words, somebody operating a foreign exchange kiosk would buy your dollars for 529 pesos. And if you wanted to buyback, they'd sell it to you for 537. So the spread between the two rates is their profit. So they're making [? 8 ?] pesos on every $1 transaction.

So you see the different rates there-- 713 for euros, Argentine pesos 45 and 54, the Brazilian real 200, 223, and so forth. Now, what we can do is, because we don't have a direct rate or a rate for the US dollar versus Canadian dollar, we can calculate across rate using these numbers. So you know, there might actually be an arbitrage opportunity here if I look at the numbers. You know, maybe I can take my US dollars, convert them into pesos, and then buy Canadian dollars, and then convert the Canadian dollars back into US dollars.

Now notice on the Canadian dollar quote, it says 470 on the left, 83 on the right. That actually means 483. Shorthand IN foreign exchange calculations may often truncate the initial number. It's just a form of shorthand

Answer rating: 100% (QA)

1 Canadian 1 US 072 Multiply by 1072 on the both sides Canadian 1 x 1072 US 072 x 1072 Canadian 139 ... View the full answer