Assume you have £515 and can exchange CAD908 for £515. Also assume you can exchange $1...
Assume you have £515 and can exchange CAD908 for £515. Also assume you can exchange $1 for CAD1.0742 and £1 for $1.59. How much arbitrage profit in pounds can you earn? (Ignore transaction costs.)
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£15.26 |
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£15.73 |
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£16.07 |
||
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£16.62 |
||
|
£16.39 |
Homework Answers
Amount of CAD from 515 Pounds =908
Amount of Dollars from 908 CAD =908/1.0742 =845.2802
Amount of Pounds from 845.2802 dollars =845.2802/1.59 =531.62
Profit =531.62-515 =16.62(Option d is correct option)
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