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What effective exchange rate implied by the big mac is

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Question 1: You sell 250,000 pesos short at the exchange rate of S(Peso/$)=14. Calculate your profit/loss if the ending exchange rate is S(Peso/$)=16 after a week. (Please keep the sign and two decimal numbers in your answer.)

Question 2: Two banks give the following quotes on the euro at the same time: Citibank NY $1.2564-82/€ Barclays London: $1.2521-54/€.
The arbitrage profit from these quotes is $ /€

Question 3: A Big Mac costs €3.7 in Europe , while it costs $5.1 in the U.S. The actual market exchange rate is S($/€)=1.3. Then real (effective) exchange rate implied by the Big Mac is

Reference no: EM132999125

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What the arbitrage profit from the quotes is : You sell 250,000 pesos short at the exchange rate of S(Peso/$)=14. Calculate your profit/loss if the ending exchange rate is S(Peso/$)=16 after a week.

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