a) Assuming triangular arbitrage is not possible and exchange rates are priced efficiently, use the following quotes to determine the percentage change in the NZD against the JPY Today 1 year ago AUD NZD 1 0362 1 0965 AUD JPY 71 85 74 65 b) You have the following quotes from three different banks Big Time Bank 71 85 JPY AUD Fack Bank 0 9601 AUD NZD Trusty Bank 69 99 JPY NZD If you can buy or sell at the given quotes, how much profit can you make using AUD $1 000 000 Clearly show each of your trades and give your profit in AUD

The Answer is in the image, click to view ...

Question: a) Assuming triangular arbitrage is not possible and exchange rates are priced efficiently, use the following quotes to determine the percentage change in the NZD

a) Assuming triangular arbitrage is not possible and exchange rates are priced efficiently, use the following quotes to determine the percentage change in the NZD against the JPY.

	Today	1 year ago
AUD NZD	1.0362	1.0965
AUD JPY	71.85	74.65

b) You have the following quotes from three different banks:

Big Time Bank	71.85 JPY AUD
Fack Bank	0.9601 AUD NZD
Trusty Bank	69.99 JPY NZD

If you can buy or sell at the given quotes, how much profit can you make using AUD $1 000 000. Clearly show each of your trades and give your profit in AUD.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

home / study / business / finance / finance questions and answers / a) assuming triangular arbitrage is not possible and exchange rates are priced efficiently, ... Your question has been answered Let...

home / study / business / finance / finance questions and answers / a) assuming triangular arbitrage is not possible and exchange rates are priced efficiently, ... Question: A) Assuming triangular...

a) Assuming triangular arbitrage is not possible and exchange rates are priced efficiently, use the following quotes to determine the percentage change in the NZD against the JPY. Today 1 year ago...

1. Assume investor MJ lives in the U.S., where the interest rates are at 3%. However, MJ decides to invest his $100,000 in Europe, where the interest rate is 4%. The current EURUSD exchange rate is...

Please quality check my solutions for this advanced heat transfer problem. Show all work. Thank you. All original documents are located at the bottom. 3.9 COMPACT HEAT EXCHANGERS 3.9.10-1 3.9.10...

a-What would be the $SDR bid if the SDR appreciates 15% against the dollar? What would be the SDR/$ offer rate if the SDR appreciates 15%? SDR is Special Drawing Rights, a basket currency precursor...

The mechanics of exchange rate arithmetic, though fundamentally simple, can be confusing for those not using it on a regular basis. The questions below are designed to provide practice in the more...

Please give me solutions for 2 documents. I have a test soon!!! LANCASTER UNIVERSITY 2012 EXAMINATIONS PART II (SECOND AND FINAL YEAR) ACCOUNTING AND FINANCE AcF 305 INTERNATIONAL FINANCIAL...

Homework #3 This homework is for investigation of the triangular parity. Follow the guidance in the below and provide your answers for all requirements. You can type work with a word processor or...

GOOD DAY MY BEST WRITER ATTACHED HERE IS MY INT 620 FINAL PROJECT ,I AM ALSO ATTACHING WHAT I HAVE WRITTEN ON HISTORIC BACKGROUND, MILESTONE ONE ,AND MILESTONE TWO FOR YOU TO COMBINED UPGRADE AND DO...

Consider the cash flow transactions depicted in the accompanying cash flow diagram with the changing interest rates specified (a) What is the equivalent present worth? (In other words, how much do...

Derive Eq. using Eqs, (8.153) using Eqs, (8.164) and(8.165). N-1 1 akn Ealk)x" \k]cos ("). = [u]x S x[k]. 0

Unlike a forward contract, a ( n ) optionfutures contractlagmatch has an explicit fee, which can be likened to the premium of an insurance policy.

Questions Q1. Write a Python program to retrieve the first and last colors from the following list: color_list = ["red", "green", "white", "blue", "black") Q2. Given the following dictionary,...