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raketka [301]
3 years ago
14

Royal bank quotes a value for the japanese yen (¥) of $0.007, and a value for the canadian dollar (c$) of $0.821. the cross exch

ange rate quoted by the bank for the canadian dollar is ¥118.00. you have $500,000 to conduct triangular arbitrage. how much will you end up with if you conduct triangular arbitrage?
Business
1 answer:
USPshnik [31]3 years ago
5 0

If you have $500,000 and the yen exchange rate is .007, you would have

500,000/.007 = 71,428,571.43 yen

Then, if the exchange rate to Canadian dollars is 118 then you would have

71428571.43/118 = 605,326.88 dollars

Then if the exchange rate back to US dollars is .821, you would end up with

605,326.88 / .821 = $737,304.36

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