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Use the Following Information to Answer Questions 13-14

Question 71

Multiple Choice

Use the following information to answer questions 13-14.
Assume that the following exchange rates exist.
Use the following information to answer questions 13-14. Assume that the following exchange rates exist.    -Suppose that you are an arbitrageur that starts with $100 in New York.Which of the following paths is correct in order to make arbitrage profit? A)  Buy pound in New York → sell pound for SFr in New York → sell SFr for dollar in New York. B)  Buy SFr in New York → sell SFr for pound in New York → sell pound for dollar in New York. C)  Buy SFr in New York → sell SFr for pound in Geneva → sell pound for dollar in New York. D)  Buy pound in New York → sell pound for SFr in London → sell SFr for dollar in New York.
-Suppose that you are an arbitrageur that starts with $100 in New York.Which of the following paths is correct in order to make arbitrage profit?


A) Buy pound in New York → sell pound for SFr in New York → sell SFr for dollar in New York.
B) Buy SFr in New York → sell SFr for pound in New York → sell pound for dollar in New York.
C) Buy SFr in New York → sell SFr for pound in Geneva → sell pound for dollar in New York.
D) Buy pound in New York → sell pound for SFr in London → sell SFr for dollar in New York.

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