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Exchange rates of the euro relative to the pound

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Reference no: EM132527536

Suppose David, a trader at the foreign exchange desk of Goldman Sachs in London, observes the following exchange rates of the euro relative to the pound and the dollar and the dollar relative to the pound:

EUR 1.1555/GBP or GBP 0.86543/EUR

EUR 0.76388/USD or USD 1.3091/EUR

USD 1.5386/GBP or GBP 0.64994/USD

Determine the arbitrage profits when David starts with EUR 10,000,000 and buys GBP.

Reference no: EM132527536

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