Suppose we observe the two exchange rates: /US$ = 100, A$/US$ = 1.5. If the current cross-rate ( /A$) between and A$ is 50, which of the following is true?
A) The correct cross-rate ( /A$) should be 33.33
B) It costs less to buy with US$
C) An US$33.33 arbitrage profit can be realized
D) All of the above
E) None of above
Correct Answer:
Verified
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