Assume the canadian spot rate is 1.18C$/US$, the swiss franc spot rate is 1.29CHF/US$ and the...

Assume the canadian spot rate is 1.18C$/US$, the swiss franc spot rate is 1.29CHF/US$ and the market cross rate is 1.11CHF/C$

A. Calculate the implied cross rate of CHF/C$.

B. Calculate the triangular profit. Assume you have US $1,000 to work with. State the currencies you need to buy and sell in order to earn the arbitrage profit

Expert Solution

jeff jeffy answered 1 month ago

assume the Canadian dollar spot rate is 1.18c$/us$, the swiss spot rate is 1.29CHF/us$ and the...

assume the Canadian dollar spot rate is 1.18c$/us$, the swiss spot rate is 1.29CHF/us$ and the market cross rate is 1.11 chf/c$ a. calculate the implied cross-rate of CHF/c$ b calculate the triangular arbitrage profit, assume you have us$1000 to work with

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