Question: Question 7 1 pts You are a U.S.-based treasurer with $1,000,000 to invest. The dollar-euro exchange rate is quoted as $1.60 = 1.00 and the

Question 7 1 pts You are a U.S.-based treasurer with $1,000,000

Question 7 1 pts You are a U.S.-based treasurer with $1,000,000 to invest. The dollar-euro exchange rate is quoted as $1.60 = 1.00 and the dollar-pound exchange rate is quoted at $2.00 = 1.00. If a bank quotes you a cross rate of 1.00 = 1.20 how can you make money? None of the options are correct. Buy $2/, buy at 1.20/, sell at $1.60/ Buy euro at $1.60/, buy at 1.20/, sell at $2/ No arbitrage is possible

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