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You go to a bank and are given these quotes:     You can buy a euro for 14 pesos.     The bank will pay you 13 pesos for a euro.     You can buy a U.S. dollar for 0.85 euros.     The bank will pay you 0.75 euros for a U.S. dollar.     You can buy a U.S. dollar for 9 pesos.     The bank will pay you 8 pesos for a U.S. dollar.   Compute the profit that you would earn using triangular arbitrage.

You go to a bank and are given these quotes:     You can buy a euro for 14 pesos.     The bank will pay you 13 pesos for a euro.     You can buy a U.S. dollar for 0.85 euros.     The bank will pay you 0.75 euros for a U.S. dollar.     You can buy a U.S. dollar for 9 pesos.     The bank will pay you 8 pesos for a U.S. dollar.   Compute the profit that you would earn using triangular arbitrage.

Essentials Of Investments
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
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You go to a bank and are given these quotes:

    You can buy a euro for 14 pesos.
    The bank will pay you 13 pesos for a euro.
    You can buy a U.S. dollar for 0.85 euros.
    The bank will pay you 0.75 euros for a U.S. dollar.
    You can buy a U.S. dollar for 9 pesos.
    The bank will pay you 8 pesos for a U.S. dollar.

 

Compute the profit that you would earn using triangular arbitrage.

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