Question: The U S dollar spot exchange rate with the Canadian dollar
The U.S. dollar spot exchange rate with the Canadian dollar is $1 = CA$1.18. The U.S. dollar and Swiss franc exchange rate is $1 = 1.219 francs. If the cross rate between the franc and Canadian dollar is 1 franc = CA$0.9750 then show that an arbitrage is possible. What positions should be taken to profit from the mispricing?
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