You have the following spot bid and ask rates between the Australian dollar (AUD), the Danish krone (DKK), and the Japanese yen (JPY): Bid Ask JPY 14.804/DKK JPY 14.952/DKK JPY 72.229/AUD JPY 72.955/AUD DKK 4.5722/AUD DKK 4.6182/AUD Which of the following is the closest to the arbitrage profit that is possible at these rates? O a. 4.11% O b. 3.70% O c. 4.60% d. 4.44% O e. 4.85%

You have the following spot bid and ask rates between the Australian dollar (AUD), the Danish krone (DKK), and the Japanese yen (JPY): Bid Ask JPY 14.804/DKK JPY 14.952/DKK JPY 72.229/AUD JPY 72.955/AUD DKK 4.5722/AUD DKK 4.6182/AUD Which of the following is the closest to the arbitrage profit that is possible at these rates? O a. 4.11% O b. 3.70% O c. 4.60% d. 4.44% O e. 4.85%

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 2BIC

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