Swiss franc/dollar-SF16077/$ Australian dollar/US dollar-A$18345/5 Australian dollar/Swiss franc-A$11521/SFr Ignoring transaction costs, does Doug Bemard have an arbitrage opportunity based on these quotes? If there is an arbitrage opportunity, what steps would he take to make an arbitrage profit, and how much would he profit if he has $1,000,000 available for this purpose? (Do not round intermediate calculations. Round your answer to 2 decimal places) Arbitrage profit
Swiss franc/dollar-SF16077/$ Australian dollar/US dollar-A$18345/5 Australian dollar/Swiss franc-A$11521/SFr Ignoring transaction costs, does Doug Bemard have an arbitrage opportunity based on these quotes? If there is an arbitrage opportunity, what steps would he take to make an arbitrage profit, and how much would he profit if he has $1,000,000 available for this purpose? (Do not round intermediate calculations. Round your answer to 2 decimal places) Arbitrage profit
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
7
Transcribed Image Text:5
Doug Bemard specializes in cross rate arbitrage. He notices the following quotes:
Swiss franc/dollar-SF16077/$
Australian dollar/US dollar-A$18345/$
Australian dollar/Swiss franc-A$11521/SFr
Ignoring transaction costs, does Doug Bernard have an arbitrage opportunity based on these quotes? If there is an arbitrage
opportunity, what steps would he take to make an arbitrage profit, and how much would he profit if he has $1,000,000 available for this
purpose? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Arbitrage profit
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