Assume the following exchange rates are quoted.
Citibank: $1.2223/€
Barclays Bank: $1.8410/£
Dresdner Bank: €1.5100/£
Is there an arbitrage opportunity? How would you execute arbitrage, and how much is (riskless) profit
with a notional amount of £ 1,000,000? Show all works to get full credits.
5.
On your post-graduation celebratory trip, you decide to travel from Munich,
Germany to Moscow, Russia. You leave Munich with 15,000 euros in your
wallet. Wanting to exchange all of these for Russian rubles, you obtain the
following quotes:
Spot rate on the dollar/euro cross rate $1.3214/€
Spot rate on the ruble/dollar cross rate Rbl 30.96/$
a. What is the Russian ruble/euro cross rate?
b. How many rubles will you obtain for your euros?
Problem 5.5 Munich to Moscow