Question

1. In New York, you can exchange $1 for €0.8569 or £0.6727. Suppose that, in Berlin, £1 costs €1.2573. How much profit can you earn on $47,485 using triangle arbitrage? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2. Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.1211 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 1.0412 euros. What is the cross-rate of euros to Swiss francs (Euro/SF)?Enter your answer rounded off to FOUR decimal points.

Answer 1