You are quoted the following series of exchange rates for the U.S. dollar ($), the Canadian dollar
Question:
$0.6000/C$ ........ C$1.6667/$
$1.2500/£ ........ £0.8000/$
C$2.5000/£ ........ £0.4000/C$
Assuming that you have $1 million in cash, how can you take advantage of this series of exchange rates? Show the series of trades that would yield an arbitrage profit, and calculate how much profit you would make.
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Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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