Čalculate the triangular arbitrage profit from the information provided if you have $1,000,000. Singapore dollar - US dollar spot exchange rate is S$1.8/S, Pound - US dollar £1.33/$ and the SS/£ 1.12. A. $1,607,142.86 B. $208,378.09 C. $1,208,378.09 D. $1,800,000

Q: The foreign exchange department of Bank of America has a bid quote on Canadian dollars (C$) of…

A: Spread % = Ask Price - Bid PriceAsk Price x 100

Q: Spot exchange rate (AUD/USD) 1.7624/1.7864 Six- month expected spot rate (AUD/USD) 1.4880/1.5120;…

A: Given: Spot rate: 1USD = AUD 1.7624 / AUD 1.7864 Forward rate: 1USD = AUD 1.4880/ AUD 1.5120…

Q: Given the following exchange rate in Malaysia and Korea:   Currencies pair Rate The Exchange…

A: Arbitrage opportunity is buying and selling at same time in two currencies.

Q: 1. On September 1, 20X1, Cano & Company, a U.S. corporation, sold merchandise to a foreign firm for…

A: There are foreign exchange transactions that take place on credit so that the amount due is paid at…

Q: Question 1 J&D produces kindles in the Euro area and exports them to the United States. Last year…

A: Introduction:  J&D manufactures kindles in Europe and sells them in the United States. J&D…

Q: Lee Junho who is a currency trader in Japan observers the following market conditions: • Annual…

A: Covered interest arbitrage is an arbitrage strategy where an investor hedges against exchange rate…

Q: The following exchange rates are available to you. (You can buy or sell at the stated rates.)…

A: ¥120.00 = 1A$ SF1.6000 = 1A$ ¥80.00 =1SF Amount available = SF10, 000,000

Q: A U.S. company’s foreign subsidiary had these amounts in local currency units (LCU) in 2020:…

A: SOLUTION-   DETERMINATION THE VALUE OF PURCHASE IN LCU- COST OF GOOD SOLD  5590000 ADD- CLOSING…

Q: On December 1, Y1, AAA, a US based company, entered into a three months forward contract to purchase…

A: The price of Forward contract is determined in such a way that the value of the contract at the…

Q: What is the two-way price for CHF/SGD? On which side of this price would the customer sell SGD? What…

A: Information Provided: Current spot rates: USD/CHF = 1.5384/89 USD/SGD = 2.3895/05 EUR/USD =…

Q: today you notice the following exchange rate quotations. $1 is equal to 4.08 Argentine pesos. 1…

A: A rate through which individuals or companies convert their domestic currency with the other…

Q: oday's foreign quotation. Below are the following quotes: - 100 JPY/USD 1.60 USD/GBP 140 JPY/GBP…

A: The arbitrage profit is due to mispricing in the market and is short term profit by buying one…

Q: Price of a US dollar in Geneva is 1.0204-1030. Price of a US dollar in Japan is 99.8877-9876.…

A: Triangular arbitrage means taking advantage of the arbitrage opportunity that exists in the currency…

Q: A television costs $710 in the United States. The same television costs 628.5 euros. If purchasing…

A: The exchange rate at which currencies of two countries are exchanged immediately by the individual…

Q: A company exports commodity X to Canada, if the total purchase price(including VAT 17%) is RMB…

A: Export pricing can be based on multiple factors namely, production cost, profit markup, insurance,…

Q: Arbitrage funds available = $6,000,500; Spot exchange rate (Kr/$) = 6.1430; 3-month forward rate…

A: A strategy in which arbitrager reduces the interest rate risk by using the difference between the…

Q: Calculate the possible rate for buying SGD (Singapore Dollar) in exchange for selling JPY as well as…

A: SGD buying rate against the JPY : Bid JPY/GBP = Bid JPY/USD / Ask USD / SGD SGD buying rate against…

Q: 1)  Assume the following exchange rates are indirect quotes, what are the equivalent direct quotes…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: USD/AUD 0.5300 AUD/EUR 1.6428 USD/EUR 0.8782

A: Starting with 1 USD, converting USD to AUD , AUD to EUR and EUR to USD

Q: Cocoa Beverage Plc exports goods to New York valued at $30,000. Receipt of payment is immediate on…

A: Bid rate is the buying rate for bank for purchasing a commodity whereas Ask rate is selling rate for…

Q: You have 1000000 CHF Assume the following exchange rates are quoted: Bank of America CHF/USD 1.56…

A: Yes. It is possible of triangular arbitrage for the given exchange rates.

Q: Crane Pharma just received revenues of $3,164,400 in Australian dollars (A$). Management has the…

A: The exchange rates refer to the rate at which the currency of one country can be exchanged for that…

Q: 1. Assume the following exchange rates for the New Zealand dollar in terms of the US dollar: North…

A: Locational arbitrage is possible when there are discrepancies in the quotation of exchange rates by…

Q: 12. Compute exchange rates, FX appreciations, and USD profits below of this U.S.-based company that…

A: The exchange rate risk is one of the most common risks that a company faces. It denotes the…

Q: Example 2: Triangular Arbitrage Suppose you are provided with the following exchange rates Market…

A: Triangular arbitrage: It is an investment strategy in which arbitrage opportunity is used due to…

Q: Suppose a U.S. firm purchases some Chinese handicrafts. The china costs 1,000 Chinese yuan. At the…

A: Handicrafts cost = 1,000 Chinese yuan  $1.00 = 6.2 yuan

Q: You buy USD 10 million against Canadian dollars at 1.3785 and sell USD 10 million at 1.3779. What is…

A: Information Provided: Bought USD 10 Million at = 1.3785 Sold USD 10 Million at = 1.3779

Q: U.S.-dollar foreign-exchange rates in late New York trading IN USS USS VS. % CHG PER USS TUES MON…

A: The exchange rates refer to the relationship between the two currency values. The exchange rate…

Q: Calculate the triangular arbitrage profit from the informationprovided if you have $1,000,000.…

A: Triangular Arbitrage refers to the process of generating a profit by making use of the exchange rate…

Q: On December 1, 20x1, you imported a machine from a foreign supplier for $100, 000, due for…

A: Difference in exchange rate=Rate on Dec 1-Rate of Dec 31=P 50-P52=-P 2

Q: On March 1, Laton Products (a U.S. firm) purchased manu-facturing inputs from a Mexican supplier for…

A: Currency exchange: Currency exchange is a business that has got legal right to exchange their…

Q: The AUD/$ spot exchange rate is 1.60 and the SF/$ is 1.25. The AUD/SF cross exchange rate is: 0.7813…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Brief, Inc., had a receivable from a foreign customer that is payable in the customer's local…

A: Foreign exchange gain =   U.S. dollar equivalent on February 15, 2021 - U.S. dollar equivalent on…

Q: Suppose exchange rates are: EUR/AUD = 1.5550 GBP/AUD = 2.8923 GBP/EUR = 1.8600   Starting with…

A: Arbitrage profits are possible if there is mispricing in the quotes of cross exchange rates.

Q: Given the following information: Exchange rate - Canadian dollar 0.665 per DM (spot) 1 Canadian…

A: Arbitrage is a strategy that uses the difference in the price of the same commodity in different…

Q: A product sells for $750 in the United States. The spot exchange rate is $1 to 1.56 Swiss francs. If…

A: The spot rate is referred as the rate of a foreign exchange contract where the delivery is immediate…

Q: FinnCo purchases goods from its Mexican supplier on 1 November 20X1; the purchaseprice is 100,000…

A: Step 1 The difference due to foreign exchange will be recognized on profit and loss account as a…

Q: Today you notice the following exchange rate quotation: $1 = 3 Argentine pesos 1 Argentine pesos =…

A: The cross exchange rates can be used to determine the amount of in currency in terms of another.

Q: Assume that 90-day U.S. securities have a 2.9% annualized interest rate, whereas 90-day Canadian…

A: The given problem can be solved using interest rate parity.

Q: The Simpson Corporation is calculating their adjusted balance sheet into U.S. Dollars. The exchange…

A: Given: Beginning rate is 1Euro =1$Current exchange rate is 0.8 Euro =1$ Assets =3000 Euros Assets in…

Q: A foreign operation has the following local inflation rates:            Year 1:  10%     Year 2:…

A: Foreign exchange market is described as over the counter market for currencies trading. Under this…

Q: Calculate the triangular arbitrage profit from the information provided if you have $1,000,000.…

A: Triangular arbitrage is the result of the discrepancy between three foreign currencies that occurs…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.