Question
1. How can foreign exchange arbitrage take place if: $1.98 = 1£ in New York and...
1. How can foreign exchange arbitrage take place if:
$1.98 = 1£ in New York and at the same time
$2.00 = 1£ in London
$ stands for US dollar
£ stands for British pound
Initial investment amount = $1 Million
2. What happens as arbitrage takes place? Explain and illustrate.
3. How much profit/loss is made? Explain.
Homework Answers
Answer #1
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