Homework Answers
In the question, GBP is costly in London compared to New York. So, profit can be made by buying GBP in New York and selling it in London.
The number of GBP that can be purchased in New York using an amount of $10000 will be = 10000 /1.3668 = GBP 7316.35938
Now, on selling GBP 7316.35938 in London we get an amount
=7316.35938*1.3679 =$10008.048
Profit that can be earned on each trade with an amount of $10000
=10008.048-10000 =$8.048 or $8.05 (Rounded to two decimal
places)
Answer: Profit=$8.05
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