What is the cross-rate in terms of yen per pound

Reference no: EM131424236

Cross-Rates and Arbitrage Suppose the Japanese yen exchange rate is ¥93 = $1, and the British pound exchange rate is £1 = $1.64.

a. What is the cross-rate in terms of yen per pound?

b. Suppose the cross-rate is ¥150 £1. Is there an arbitrage opportunity here? If there is, explain how to take advantage of the mispricing.

Reference no: EM131424236

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