You have $43,000 and observe the following exchange rates: Exchange rate...
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Finance
You have $43,000 and observe the following exchange rates:
| Exchange rate | Bid | Ask |
| Value of euro in U.S. dollars | $1.15 | $1.16 |
| Value of Swiss franc in U.S. dollars | $1 | $1.01 |
| Value of euro in Swiss francs | CHF1.1 | CHF1.11 |
1. Is there an arbitrage opportunity? If so, what should you do to exploit it?
- Yes: buy Swiss francs with euros
- No
- Yes: buy euros with Swiss francs
2. What is your profit from exploiting the opportunity once (in $)?
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