Arbitrage profit assuming triangle arbitrage is possible

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1. Which term best applies to the situation where an investor cares less about losing $1 of his profits than he does about losing $1 of his original investment?

get-evenitis

familiarity

house money effect

snakebite effect

home bias

2. Cher has $10,000. The following quotations are available to her for US dollars ($), Convertible Marka (KM), and Swiss Francs (SF). She may either buy or sell at the stated rates:

U.S. Bank:$2.00/SF

Bosnia Bank:$4.20/KM

Swiss Bank:SF2.40/KM

What is Cher’s arbitrage profit assuming a triangle arbitrage is possible? (Round answer to nearest whole number.)

Reference no: EM131878523

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