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    Spot Exchange Rates and Exchange Rate Arbitrage

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    Country Contract $/Foreign Currency
    Canada-dollar Spot .8437
    30-day .8417
    90-day .8395
    Japan-yen Spot .004684
    30-day .004717
    90-day .004781
    Switzerland Spot .5139
    30-day .5169
    90-day .5315

    Question 1. (Spot exchange rates) An American business pays $10,000, $15,000, and $20,000 to suppliers in, respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive?

    Question 2. (Exchange rate arbitrage)You own $10,000. The dollar rate in Tokyo is 216.6743. The yen rate in New York is given in the preceding table. Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?

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    https://brainmass.com/business/foreign-exchange-rates/spot-exchange-rates-exchange-rate-arbitrage-246055

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    Please see the attached Excel file:
    COUNTRY-CURRENCY CONTRACT $/Foreign Currency
    Canada - dollar (CAD) Spot 0.8437
    30 day 0.8417
    90 day 0.8395

    Japan - yen (JPY) Spot 0.004684
    30 day 0.004717
    90 day 0.004781

    Switzerland - franc (CHF) Spot 0.5139
    30 day 0.5169
    90 day 0.5315

    US dollars= USD
    Yen= JPY
    Swiss Franc= CHF

    "Question 1. (Spot exchange rates) An American business pays $10,000, $15,000, and $20,000 to ...

    Solution Summary

    Answers 2 questions on Spot exchange rates, Exchange rate arbitrage.

    $2.19

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