1 riskless profit on the swiss franc the following exchange, Ask an Expert

Finance

1. Riskless profit on the Swiss franc. The following exchange rates are avaliable to you.(you can buy or ssell at the started rates.)

Mt Fuji Bank ¥120.00/A$

Mt Rushmore Bank SF1.6000/A$

Mt Blanc Bank ¥80.00/SF

Assume that you have an initial SF 10,000,000. Can you make a profit via triangular arbitrage? If so, show steps and calculate the amount of profit in Swiss francs.

2. Australian-euro arbitrage. A corporate treasury with operations in Sydney simultaneously calls Westpac Bank in Sydney and Barclays in London. The two banks give the following quotes at the same time on euro:

Westpac Sydney: A$1.1840-60/€ Barclays London A$1.1830-50/€

Explain, using 1 million or its euro equivalent, how the corporate treasury could make geographical arbitrage profit with the two exchange rate quotes.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91416103

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