Assume you have £100 and can exchange Can$180 for £100.Also assume you can exchange $1 for Can$1.1417 and £1 for $1.5649.How much arbitrage profit in pounds can you earn? Ignore transaction costs.

Name: Assume you have £100 and can exchange Can$180 for £100.Also assume you can exchange $1 for Can$1.1417 and £1 for $1.5649.How much arbitrage profit in pounds can you earn? Ignore transaction costs.
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Question

Quizplus · Accepted Answer

[£100(Can$180 / £100)($1 / Can$1.1417)(£1 / $1.5649)] − £100 = £.75

Assume You Have £100 and Can Exchange Can$180 for £100