You go to a bank and are given these quotes: You can buy a euro for 17 pesos. The bank will pay you 16 pesos for a euro. You can buy a U.S. dollar for 0.69 euros. The bank will pay you 0.61 euros for a U.S. dollar. You can buy a U.S. dollar for 14 pesos. The bank will pay you 12 pesos for a U.S. dollar. You have $5,000. Compute the profit that you would earn using triangular arbitrage. Enter "0", if you incur a loss. Do not round intermediate calculations. Round your answer to the nearest cent.
You go to a bank and are given these quotes: You can buy a euro for 17 pesos. The bank will pay you 16 pesos for a euro. You can buy a U.S. dollar for 0.69 euros. The bank will pay you 0.61 euros for a U.S. dollar. You can buy a U.S. dollar for 14 pesos. The bank will pay you 12 pesos for a U.S. dollar. You have $5,000. Compute the profit that you would earn using triangular arbitrage. Enter "0", if you incur a loss. Do not round intermediate calculations. Round your answer to the nearest cent.
Chapter20: Short-term Financing
Section: Chapter Questions
Problem 3BIC
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Question
You go to a bank and are given these quotes:
You can buy a euro for 17 pesos.
The bank will pay you 16 pesos for a euro.
You can buy a U.S. dollar for 0.69 euros.
The bank will pay you 0.61 euros for a U.S. dollar.
You can buy a U.S. dollar for 14 pesos.
The bank will pay you 12 pesos for a U.S. dollar.
You have $5,000.
Compute the profit that you would earn using triangular arbitrage. Enter "0", if you incur a loss. Do not round intermediate calculations. Round your answer to the nearest cent.
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