a)i)The current spot rate between UK and USA is 0.80 GBP/USD and the current spot ratebetween France

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a)i)The current spot rate between UK and USA is 0.80 GBP/USD and the current spot ratebetween France and USA is 0.90 EUR/USD. What should be the EUR/GBP exchange rate that would be indicative of an absence of arbitrage?

ii)If the actual rate observed in the market is 1.3 EUR/GBP, what would be your arbitrage profit if you had 10 GBP??

Posted Date: May 19, 2024 10:00 PM

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a)i)The current spot rate between UK and USA is 0.80 GBP/USD and the current spot ratebetween France

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