Assume the official USD equivalent of one Canadian dollar is .7813 and the USD equivalent of the U.K.pound is 1.3699.Further assume you have 100 pounds and have been offered Can$180 for them.If you use triangle arbitrage and the entire £100,you can earn a profit of:

Question

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First, we need to convert the pounds to US dollars:

100 pounds * 1.3699 USD/pound = 136.99 USD

Next, we need to convert the US dollars to Canadian dollars:

136.99 USD * (1/0.7813) CAD/USD = 175.22 CAD

Finally, we need to convert the Canadian dollars back to pounds:

175.22 CAD * 0.7813 USD/CAD * (1/1.3699) pound/USD = 100.26 pounds

We started with 100 pounds and ended up with 100.26 pounds, for a profit of 0.26 pounds.

Therefore, the answer is B) £2.66.

Assume the Official USD Equivalent of One Canadian Dollar Is