In a free floating exchange rate regime, the demand and supply for a currency determine its price.

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b) Calculate the GBP/DKK cross rate using the following quotes. Show all calculations.

USD/DKK 7.1931-37

USD/GBP 0.8463-69

c) What arbitrage strategy can be used if the following rates are observed in the market and what will be the risk free profit amount? Show all calculations.

USD1 = AUD1.5540

USD1 = SGD1.5530

AUD1 = SGD 1.1610

Related Book For answer-question

International Economics

ISBN: 978-0073523170

15th edition

Authors: Thomas A. Pugel

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Posted Date: Apr 20, 2024 01:35 PM

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In a free floating exchange rate regime, the demand and supply for a currency determine its price.

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ANSWER a Correct In a freefloating exchange rate regime the exchange rate of a currency is determine... View the full answer

International Economics

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