Are the market cross rates sustainable

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Reference no: EM131450381

Data given by american bank €:$ = S($/€) = 1.2000-1.2050; £:$=S($/£) = 1.7950-1.8000 data by british bank £:€=S(€/£) = 1.5050-1.5070

A) find out the home made cross rates for S(€/£)

B) Are the market cross rates sustainable? If not, what can market do to eliminate market mispricing? Will there be any profit to arbitrageurs,is so how much?

Reference no: EM131450381

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