Attached is a picture of my question. The course is International Financial Mana

Question

Attached is a picture of my question. The course is International Financial Management. Any help would be greatly appreciated. 1. National Bank quotes the following for the British pound and the New Zealand dollar: Quoted Bid Price ed Ask Price $1.62 $.56 $1.61 Value of a British pound (E) in $ Value of a New Zealand dollar (NZS) in S Value of a British pound in S.55 New Zealand dollars NZ$2.95 NZ$2.96 Assume you have $10,000 to conduct triangular arbitrage. What is your profit from implementing this strategy?

Explanation / Answer

$10,000/$1.62 = £6,172.84 * 2.95

= NZ$18,209.88 * $.55

= $10,015.43

Therefor , the profit is $15.43

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