Consider The Exchange Rates Of Canada And Mexico With Respect To The United States Over Per To T 1 S Cad Usd S Mxp U 1 (28.77 KiB) Viewed 18 times
a) Assume no transaction costs. If the market spot rate between
Mexico and Canada, S(MXP/CAD), at time t+1 is 18, is there an
arbitrage opportunity? If so, calculate the profits..
b) Assume no transaction costs. If the market spot rate between
Mexico and Canada, S(MXP/CAD), at time t is 16.16, is there an
arbitrage opportunity? If so, calculate the profits.
Consider the exchange rates of Canada and Mexico (with respect to the United States) over per to t+1. S(CAD/USD) S(MXP/USD) 1.25 20.20 t+1 1.12 20.46
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