Thomas , a currency trader in East African Community, has ksh 400,000. He wishes to assess if triangular arbitrage by moving to Uganda, and Tanzania. The exchange rate quotes from the currency convertor was: 32TZ/1 KES 20UGH/IKES
Thomas , a currency trader in East African Community, has ksh 400,000. He wishes to assess if triangular arbitrage by moving to Uganda, and Tanzania. The exchange rate quotes from the currency convertor was: 32TZ/1 KES 20UGH/IKES
Chapter36: Exchange Rates And Financial Links Between Countries
Section: Chapter Questions
Problem 13E
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Thomas , a currency trader in East African Community, has ksh 400,000. He wishes to assess if triangular arbitrage by moving to Uganda, and Tanzania. The exchange rate quotes from the currency convertor was:
- 32TZ/1 KES
- 20UGH/IKES
Agreed exchange rate between Uganda shillings and Tanzania shilling was 1.5 UGH /1TZ
Compute the cross exchange rate and triangular arbitrage profit.
Explain your answer.
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