finance-Data given by american bank â¬:$ = S($/â¬) = 1.2000-1.2050; £:$=S($/£) = 1.7950-1.8000
QUESTION
Data given by american bank â¬:$ = S($/â¬) = 1.2000-1.2050; £:$=S($/£) = 1.7950-1.8000 data by british bank £:â¬=S(â¬/£) = 1.5050-1.5070A) find out the home made cross rates for S(â¬/£)B) Are the market cross rates sustainable? If not, what can market do to eliminate market mispricing? Will there be any profit to arbitrageurs,is so how much?C) find out the value of the cross rate S(â¬/£), both bid and ask, that will eliminate the arbitrage profit opportunity
ANSWER:
Expert paper writers are just a few clicks away
Place an order in 3 easy steps. Takes less than 5 mins.