You are a trader in Canberra and currently observe the following exchange rates on the trading screen

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Question:

You are a trader in Canberra and currently observe the following exchange rates on the trading screen for the Australian dollar (AUD), Japanese Yen (JPY), and United States (US) dollar (USD):

AUD per USD (AUD/USD) 1.4531 – 1.4551

JPY per AUD (JPY/AUD) 77.95 – 78.78

JPY per USD (JPY/USD) 105.29 – 105.82

Suppose that you have AUD 500,000 in your trading account and interest rates are 0.

Can you identify any positive arbitrage opportunities (in AUD) by using these exchange rates?

Explain and show your working clearly and completely.

Related Book For answer-question

Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science

ISBN: 978-0324656633

5th edition

Authors: Cliff T. Ragsdale

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Posted Date: Jan 02, 2023 11:40 PM

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You are a trader in Canberra and currently observe the following exchange rates on the trading screen

Question:

Expert Answer:

ANS WER No there are no positive arbit rage opportunities with these exchange rates and interest ra... View the full answer

Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science

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