Q3 GT Bank Ghana Limited quotes JPY/EUR 155-165, and GCB Bank quotes EUR/JPY 0.0059-0.0063. Are these quotes identical? If not, is there an opportunity for arbitrage? If there is an opportunity for arbitrage, how would one profit from it? Given the bid-ask quotes for jpy/gbp 220-240, at what rate will: Mr. Agbo purchase gbp? Mr. Agbo sell gbp? Mr. Debrah purchase jpy? Mr. Kwaku sell jpy?
Q3 GT Bank Ghana Limited quotes JPY/EUR 155-165, and GCB Bank quotes EUR/JPY 0.0059-0.0063.
Are these quotes identical? If not, is there an opportunity for arbitrage?
If there is an opportunity for arbitrage, how would one profit from it?
Given the bid-ask quotes for jpy/gbp 220-240, at what rate will:
Mr. Agbo purchase gbp? Mr. Agbo sell gbp? Mr. Debrah purchase jpy? Mr. Kwaku sell jpy?
Q4 An analyst holds a set of forward contracts on euro, against usd (=hc). Below are the forward prices in the contract; the current forward prices (if available) or at least the current spot rate and interest rates (if no forward is available for this time to maturity). Compute the fair value of the contracts.
(a) Purchased: eur 1m 60 days (remaining). Historic rate: 1.350; current rate for same date: 1.500; risk-free rates (simple per annum): 3% in usd, 4% in euro.
(b) Purchased: eur 2.5m 75 days (remaining). Historic rate: 1.300; current spot rate: 1.5025; risk-free rates (simple per annum): 3% in usd, 4% in euro.
(c) Sold: eur 0.75m 180 days (remaining). Historic rate: 1.400; current rate for same date: 1.495; risk-free rates (simple per annum): 3% in usd, 4% in euro.
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