IF dollar-euro exchange rate is USD1.25 = EUR1.00 and the dollar-Yen exchange rate is JPY200 = USD1.00. What is the EUR-JPY cross rate?
USD equivalent |
||
Country |
BID |
ASK |
Switzerland (Franc) CHF |
$0.65/CHF |
$0.68/CHF |
Euro € |
$1.15/€ |
$1.2/€ |
$1.2195/€ or €0.82/$
$1.2262/£ or £0.8155/$
If she notices a correspondent bank quotes the cross exchange rate of €1.10/£. Is there an arbitrage opportunity? If so, how can Helen Depp exploit this if she has €1,550,000? Explain strategy and numbers for each step of the strategy.
Get Answers For Free
Most questions answered within 1 hours.