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Dmitry_Shevchenko [17]
3 years ago
13

Given the following exchange rates, which of the multiple-choice choices represents a potentially profitable intermarket arbitra

ge opportunity? ¥129.87/$ €1.1226/$ €0.00864/¥
Business
1 answer:
emmainna [20.7K]3 years ago
7 0

Answer:

¥114.96/€

Explanation:

An intermarket arbitrage opportunity is the act of exploiting an arbitrage opportunity resulting from a pricing discrepancy among three different currencies in the foreign exchange market. Trading in foreign exchange takes place worldwide, the major currency trading centers are located in  London, New York, and Tokyo.

In the given question, if you reverse all three exchange rates by calculating 1/rate (change yendollar into dollaryen and so forth), the choice that represents the required opportunity is ¥114.96/€

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Answer:

Coupon= $30 per period.

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Explanation:

1.) Coupon rate * face value of bond = coupon

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2.) t= number of periods = years of maturity * coupon payment semi-annual

t= 10 * 2 = 20 periods.

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