8) Say that you observed the three following exchange rates prevailing in a market. $1 =... 8) Say...

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Finance

8) Say that you observed the three following exchange ratesprevailing in a market.
$1 = SKr7.3068 €1 = $1.2572 €1 = SKr 9.4541
Can you see an opportunity for arbitrage? Explain thesteps.*
If so, assuming that you have $1m to invest, what is theprofit you can earn from pursuing your strategy (once)?
(assume no transaction costs and no bid-ask spreads etc)
Hint: if you are stuck, try to work out what the €-SKr rateshould be.

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8*) Say that you observed the three following exchange ratesprevailing in a market.$1 =...8*) Say that you observed the three following exchange ratesprevailing in a market.$1 = SKr7.3068 €1 = $1.2572 €1 = SKr 9.4541Can you see an opportunity for arbitrage? Explain thesteps.If so, assuming that you have $1m to invest, what is theprofit you can earn from pursuing your strategy (once)?(assume no transaction costs and no bid-ask spreads etc)Hint: if you are stuck, try to work out what the €-SKr rateshould be.

8*) Say that you observed the three following exchange rates prevailing in a market. $1 =... 8*) Say...