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Accounting help



a. Suppose the Japanese yen exchange rate is 80 = $1, and the British pound exchange rate is 1 = $1.58.

What is the cross-rate in terms of yen per pound?

b. Suppose the cross-rate is 129 = 1. What is the arbitrage profit per dollar used?

I got 126.40 for the cross rate in terms of yen per pound.

Can anyone explain how to find the arbitrage profit per dollar used? Thanks!



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Posted Answers:

a. 126.40

b. $1.5184