7.1 Find a Web site that shows exchange rates for all major international curren

Question

7.1 Find a Web site that shows exchange rates for all major international currencies. At the time of writing, xe.com and oanda.com are examples of such sites.

       A.    Is the British Pound shown? If not, why not? (You might have to do some investigation online if you're not familiar with the history of European currency.)

       B.   What is the exchange rate between the Canadian dollar and the US dollar?

       C.   xe.com also allows you to see exchange rates for gold ounces (under "more currencies available"). What does xe.com (or a similar site) say 1 ounce of gold is worth in Canadian dollars? In US dollars? What does this imply is the exchange rate between Canadian dollars in US dollars? Is this the same as your answer to part B?

        D.   If you saw that the US dollar price of gold was one dollar less than the price shown, how could you use that information to make an arbitrage profit?

Explanation / Answer

A. Yes the British Pound is show on xe.com or others.

B. 1 Canadian Dollar is equals to 0.76 US Dollar.

C. XE.com (XE) is a Canadian-based online foreign exchange tools and services company headquartered in Newmarket, Ontario. It is best known for its online currency converter application and offers exchange rate information, online money transfers, and other currency-related services on its web site. XE claims to be the world's favorite currency site. As of early 2013, independent ranking site Alexa ranks XE in the top 500 of all sites worldwide by traffic, and a top 100 traffic site in Ireland, South Africa, and the UAE

Yes this is the same as my answer to part B.

D. SOLUTION:

Example:

Your risk-free arbitrage profit is $75,269.

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.