Evaluate the arbitrage opportunity with the triangular arbitrage methods for the following currency pairs and identify the preferred direction of trade Bid CHFUSD 1.0178 Ask 1.0202 USDGBP 0.7434 0.7443 CHFGBP 0.6512 0.6534 Please calculate both directions and provide the answers. In your answer below, you could provide a 3x3 table (see the top right corner of the text box) and add the following: Direction 1 Direction 2 Calculation answer answer Edit View Insert Format Tools Table 12pt v Paragraph BTUAV Preferred direction (Y/N) answer answer

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter5: Currency Derivatives
Section: Chapter Questions
Problem 28QA
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Evaluate the arbitrage opportunity with the triangular arbitrage methods for the following
currency pairs and identify the preferred direction of trade
Bid
CHFUSD
1.0178
Ask
1.0202
USDGBP 0.7434
0.7443
CHFGBP
0.6512
0.6534
Please calculate both directions and provide the answers. In your answer below, you could
provide a 3x3 table (see the top right corner of the text box) and add the following:
Direction 1
Direction 2
Calculation
answer
answer
Edit View Insert Format Tools Table
12pt v
Paragraph
BTUAV
Preferred direction (Y/N)
answer
answer
Transcribed Image Text:Evaluate the arbitrage opportunity with the triangular arbitrage methods for the following currency pairs and identify the preferred direction of trade Bid CHFUSD 1.0178 Ask 1.0202 USDGBP 0.7434 0.7443 CHFGBP 0.6512 0.6534 Please calculate both directions and provide the answers. In your answer below, you could provide a 3x3 table (see the top right corner of the text box) and add the following: Direction 1 Direction 2 Calculation answer answer Edit View Insert Format Tools Table 12pt v Paragraph BTUAV Preferred direction (Y/N) answer answer
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