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    Arbitrage Profits of capital

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    Africa-dollar Spot .3893
    30-day .3910
    90-day .3958

    ST-1. You own $10,000. The U.S. dollar rate on the Africa dollar is 2.5823 AF$/US$. The Africa dollar rate is given in the accompanying table. Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?

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    Africa-dollar          Spot   .3893
                           30-day .3910
                           90-day .3958

    ST-1. You own $10,000. The U.S. ...

    Solution Summary

    The solution calculates the value of arbitrage profit in currency trading.