If the euro is priced at 18410 in new york and the pound is, Ask an Expert

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If the euro is priced at $1.8410 in New York and the pound is priced at $1.2223 in London. At the same time, Fran banks are offering the euro at 1.5100£. Based on calculation of a cross rate between the US dollar ($) and euro (€) and comparing it with the market cross rate, you discovered there is a triangular arbitrage opportunity. Please how the detail of the questions,

1. You arbitrage transaction will be to

buy pound sterling, sell the US dollar

buy the pound sterling, sell the euro

buy euro, sell the US dollar

buy euro, sell pound sterling

buy US dollar, sell euro and pound sterling

2. Now with € 1,000,000 arbitrage capital, how much money will you end up with after carrying out the entire round of triangular arbitrage (Round all your calculations to 2 decimal places)?

€ 1,506,176.88

€ 1,000,015.35

€ 997.468.13

€ 1,002,538.29

€ 1,841,000.03

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92680053

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