Question

Paula has $100,000. The following quotations are available to her for US dollars ($), Euros (€) and Yen (¥). She may either buy or sell at the stated rates:

– U.S. Bank: $1.15/€ –

French Bank: €0.0098/¥ –

Japanese Bank: ¥90.40/$

What is Paula’s approximate arbitrage profit assuming a triangle arbitrage is possible?

A. $7,104

B. $8,021

C. $1,846

D. $7,037

E. $1,881

Answer #1

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