Given the following information:
Bank A: $\quad$ SF $1.5 / \$$
Bank B: $\quad \$ 1.6 /$ pound
Bank C: $\quad$ pound 0.45/SF a)What kind of arbitrage is possible?
b)If you have SF100,000 for the arbitrage,what arbitrage profit can be made?
c)At what exchange rate at the Credit Suisse would there be no arbitrage (assume that the other two exchange rates don't change)?

Question

Given the following information:
 Bank A: $\quad$ SF $1.5 / \$$
Bank B: $\quad \$ 1.6 /$ pound
Bank C: $\quad$ pound 0.45/SF a)What kind of arbitrage is possible?
b)If you have SF100,000 for the arbitrage,what arbitrage profit can be made?
c)At what exchange rate at the Credit Suisse would there be no arbitrage (assume that the other two exchange rates don't change)?

Quizplus · Accepted Answer

The Answer of Given the following information:
 Bank A: $\quad$ SF $1.5 / \$$
Bank B: $\quad \$ 1.6 /$ pound
Bank C: $\quad$ pound 0.45/SF a)What kind of arbitrage is possible?
b)If you have SF100,000 for the arbitrage,what arbitrage profit can be made?
c)At what exchange rate at the Credit Suisse would there be no arbitrage (assume that the other two exchange rates don't change)?

Given the Following Information: Bank A \quad SF 1.5/$1.5 / \$1.5/$

Given the Following Information:
Bank A $\quad$ SF $1.5 / \$$