Identify positive arbitrage opportunities

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Reference no: EM133233607

You are a trader in Canberra and currently observe the following exchange rates on the trading screen for the Australian dollar (AUD), Japanese Yen (JPY), and United States (US) dollar (USD):

AUD per USD (AUD/USD) 1.4531 - 1.4551

JPY per AUD (JPY/AUD) 77.95 - 78.78

JPY per USD (JPY/USD) 105.29 - 105.82

Suppose that you have AUD 500,000 in your trading account and interest rates are 0. Can you identify any positive arbitrage opportunities (in AUD) by using these exchange rates? Explain and show your working clearly and completely.

Reference no: EM133233607

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