Assume your firm has transferred you to Zurich Switzerland. You work in the triangular arbitrage division. View the following exchange rates. Is an arbitrage opportunity available? If not, explain why an opportunity does not exist. If so, from the Swiss point of view show how to exploit the opportunity. CHF .8976 = $1.00, $.0130 = INR 1.00, INR 92.7904 = CHF 1 Now say instead of working in Zurich, you were employed in Mumbai, India. How does that change your thinking on the arbitrage? PLEASE ANWSER CORRECTLY AND SHOW WORK

Assume your firm has transferred you to Zurich Switzerland. You work in the triangular arbitrage division. View the following exchange rates. Is an arbitrage opportunity available? If not, explain why an opportunity does not exist. If so, from the Swiss point of view show how to exploit the opportunity. CHF .8976 = $1.00, $.0130 = INR 1.00, INR 92.7904 = CHF 1 Now say instead of working in Zurich, you were employed in Mumbai, India. How does that change your thinking on the arbitrage? PLEASE ANWSER CORRECTLY AND SHOW WORK

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter12: Managing Economic Exposure And Translation Exposure

Section: Chapter Questions

Problem 3IEE

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Question

Assume your firm has transferred you to Zurich Switzerland. You

work in the triangular arbitrage division. View the following

exchange rates. Is an arbitrage opportunity available? If not,

explain why an opportunity does not exist. If so, from the Swiss

point of view show how to exploit the opportunity.

CHF .8976 = $1.00,

$.0130 = INR 1.00,

INR 92.7904 = CHF 1

Now say instead of working in Zurich, you were employed in

Mumbai, India. How does that change your thinking on the

arbitrage?

PLEASE ANWSER CORRECTLY AND SHOW WORK

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