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Suppose exchange rates are: EUR/AUD = 1.5550 GBP/AUD = 2.8923 GBP/EUR = 1.8600   Starting with 10,000 AUD, what are the one-round-trip arbitrage profits rounded to the nearest AUD?   14,180 AUD No arbitrage profit is possible. 1,961 AUD 73,654 AUD

Suppose exchange rates are: EUR/AUD = 1.5550 GBP/AUD = 2.8923 GBP/EUR = 1.8600   Starting with 10,000 AUD, what are the one-round-trip arbitrage profits rounded to the nearest AUD?   14,180 AUD No arbitrage profit is possible. 1,961 AUD 73,654 AUD

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter27: Multinational Financial Management
Section: Chapter Questions
Problem 6P
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Suppose exchange rates are:

EUR/AUD = 1.5550

GBP/AUD = 2.8923

GBP/EUR = 1.8600

 

Starting with 10,000 AUD, what are the one-round-trip arbitrage profits rounded to the nearest AUD?

 

14,180 AUD

No arbitrage profit is possible.

1,961 AUD

73,654 AUD



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