Consider the following set of spot exchange rates: US $ Equivalent Foreign Currency per US $ Swiss Franc .8759 1.1417 Eu

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answerhappygod
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Consider the following set of spot exchange rates: US $ Equivalent Foreign Currency per US $ Swiss Franc .8759 1.1417 Eu

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Consider the following set of spot exchange rates: US $
Equivalent Foreign Currency per US $ Swiss Franc .8759 1.1417 Euros
.7075 1.4135 In the German market, the spot rate for the Swiss
franc is 1.26 Euros. a) Set up a triangular arbitrage to exploit
the difference between this rate and the cross-rate in the US
market. Assume your initial purchase in the US is for 1,000,000
francs or Euros (whichever one you want to buy in the US). What is
your profit, in US dollars?
a. $813 b. $4365 c. $22416.67 d. $15550
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