Question

SHOW ALL WORK PLEASE

4. Triangular Arbitrage

Riskless profit using 10,000,000 Swiss franc. The following exchange rates are available to you. (You can buy or sell at the stated rates.)

Mt. Fuji Bank

Mt. Rushmore Bank

Mt. Blanc Bank

¥120.00/$ SF 1.6000/$ ¥80.00/SF

Answer #1

Mt. Fuji Bank: ¥120.00/$

Mt. Rushmore Bank: SF 1.6000/$

Mt. Blanc Bank: ¥80.00/SF

Step 1: Exchange Swiss franc for ¥ from Mt. Blanc Bank

10,000,000*80.00 = ¥800,000,000

Step 2: Exchange ¥800,000,000 for $ from Mt. Fuji Bank

800,000,000/120.00 = $6,666,666.666666667

Step 3: Exchange $6,666,666.666666667 for SF from Mt. Rushmore Bank

$6,666,666.666666667*1.60 = SF 10,666,666.666666668

Arbitrage profit = 10,666,666.666666668 - 10,000,000

**Arbitrage profit = SF 666,666.666666668**

Swissie Triangular Arbitrage. The following
exchange rates are available to you. (You can buy or sell at the
stated rates.) Assume you have an initial SF 13,000,000. Can you
make a profit via triangular arbitrage? If so, show the steps and
calculate the amount of profit in Swiss francs (Swissies).
Mt Fuji Bank
90.34 Euro/$
Mt. Rushmore Bank
SF 1.02/$
Mt. Blanc Bank
91.97 Euro/SF
Calculate First arbitrage opportunity attempt below:
(Round to the nearest cent)
Attempt number 1: Start...

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arbitrage? If so, show the steps and calculate the amount of profit
in Swiss francs. [10 marks]

The following exchange rates are available to you. (You can buy
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Assume you have an initial USD 12,000. Can you make a
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5pt each, 50 pts total. Show your work!
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