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Assume the following exchange rates Value of Canadian Dollar in U.S dollars                          $.92 value of New Zealand dollar in U.S dollars                     $.32 Value of Canadian dollar in New Zealand dollars        NZ $3.00 Given this information, starting with U.S dollar, you and others can perform triangular arbitrage by________. a. Using U.S dollar to buy New Zealand dollar at $.32. b. Using U.S dollar to buy Canadian dollar at $.92 c. Using New Zealand dollar to buy Canadian dollar at NZ$3.00 d. Using U.S dollar to buy Canadian dollar at NZ$3.00

Assume the following exchange rates Value of Canadian Dollar in U.S dollars                          $.92 value of New Zealand dollar in U.S dollars                     $.32 Value of Canadian dollar in New Zealand dollars        NZ $3.00 Given this information, starting with U.S dollar, you and others can perform triangular arbitrage by________. a. Using U.S dollar to buy New Zealand dollar at $.32. b. Using U.S dollar to buy Canadian dollar at $.92 c. Using New Zealand dollar to buy Canadian dollar at NZ$3.00 d. Using U.S dollar to buy Canadian dollar at NZ$3.00

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter29: International Finance
Section: Chapter Questions
Problem 8P
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Assume the following exchange rates

Value of Canadian Dollar in U.S dollars                          $.92

value of New Zealand dollar in U.S dollars                     $.32

Value of Canadian dollar in New Zealand dollars        NZ $3.00

Given this information, starting with U.S dollar, you and others can perform triangular arbitrage by________.

a. Using U.S dollar to buy New Zealand dollar at $.32.

b. Using U.S dollar to buy Canadian dollar at $.92

c. Using New Zealand dollar to buy Canadian dollar at NZ$3.00

d. Using U.S dollar to buy Canadian dollar at NZ$3.00

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