Question: Please provide explanations for both parts. The table below presents quotes and cross-quotes on GBP and CHF. USD/GBP: Price for GBP in New York (in
Please provide explanations for both parts.
The table below presents quotes and cross-quotes on GBP and CHF. USD/GBP: Price for GBP in New York (in USD) : USD 1.725 for 1 GBP USD/CHF: Price for CHF in Chicago (in USD): USD 0.645 for 1 CHF CHF/GBP: Price for GBP in Zurich (in CHF) : CHF 2.75 for 1 GBP If the speculator has access to USD 20,000,000, calculate the maximum profit in one triangular transaction. $ 565,217 . The table below presents quotes and cross-quotes on GBP and CHF. USD/GBP: Price for GBP in New York (in USD) : USD 1.725 for 1 GBP USD/CHF: Price for CHF in Chicago (in USD): USD 0.645 for 1 CHF CHF/GBP: Price for GBP in Zurich (in CHF) : CHF 2.75 for 1 GBP 3 If all traders use triangular arbitrage to maximize profits, then the dollar price of GBP for the New York dealer will the CSF price of GBP for the Zurich dealer will ; and the dollar price of CHF for the Chicago dealer will increase, decrease, decrease The table below presents quotes and cross-quotes on GBP and CHF. USD/GBP: Price for GBP in New York (in USD) : USD 1.725 for 1 GBP USD/CHF: Price for CHF in Chicago (in USD): USD 0.645 for 1 CHF CHF/GBP: Price for GBP in Zurich (in CHF) : CHF 2.75 for 1 GBP If the speculator has access to USD 20,000,000, calculate the maximum profit in one triangular transaction. $ 565,217 . The table below presents quotes and cross-quotes on GBP and CHF. USD/GBP: Price for GBP in New York (in USD) : USD 1.725 for 1 GBP USD/CHF: Price for CHF in Chicago (in USD): USD 0.645 for 1 CHF CHF/GBP: Price for GBP in Zurich (in CHF) : CHF 2.75 for 1 GBP 3 If all traders use triangular arbitrage to maximize profits, then the dollar price of GBP for the New York dealer will the CSF price of GBP for the Zurich dealer will ; and the dollar price of CHF for the Chicago dealer will increase, decrease, decrease
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