# European euro per problem 616 direct quotation on the

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European euro (\$ per )
Problem 6.16 Direct Quotation on the Dollar
Problem 6.17 Mexican Peso - European Euro Cross RateAssumptionsExchange rateMexican peso, pesos/dollar (Ps/\$)12.45 0.7550 Calculated cross rate, pesos/euro16.4901 0.0606 Calculate the cross rate between the Mexican peso (Ps) and the euro (€ ) from the following two spot rates: Ps12.45/\$ and € 0.7550/\$. European euro, euros/dollar (€/\$)pesos/euro = (Ps/\$) / (€/\$)or equivalently, euros/peso (€/Ps)
Problem 6.18 Pura VidaAssumptionsExchange rateCosta Rican colón, colónes/dollar (₡/\$)500.29 Canadian dollar, Canadian dollars/dollar (C\$/\$)1.0200 Calculated cross rate, pesos/euro490.4804 or equivalently, Canadian dollars/colón (C\$/₡)0.0020 Calculate the cross rate between the Costa Rican colón (₡) and the Canadian dollar (C\$ ) from the following two spot rates: ₡500.29/\$ and C\$1.02/\$. Colónes/Canadian dollar = (₡/\$) / (C\$/\$)
Problem 6.19 Around the HornCitibank quotes U.S. dollar per pound:\$1.5900/£National Westminster quotes euros per pound:€1.2000/£Deutschebank quotes U.S. dollar per euro:\$0.7550/€AssumptionsExchange rateCitibank quote: US\$/pound (\$/£)1.5900 1.2000 0.7550 Initial investment\$ 1,000,000.00 Path #1: US\$ to euros to pounds to US\$Start with US\$\$ 1,000,000.00 Convert to euros at Deutschebank quote€ 1,324,503.31Convert euros to pounds at NatWest quote£1,103,752.76Convert pounds to US\$ at Citibank quote\$ 1,754,966.89 Arbitrage gain (loss)\$ 754,966.89 Path #2: US\$ to pounds to euros to US\$Start with US\$\$ 1,000,000.00 Convert to pounds at Citibank quote£628,930.82Convert pounds to euros at NatWest quote€ 754,716.98Convert euros to US\$ at Deutschebank quote\$ 569,811.32 Arbitrage gain (loss)\$ (430,188.68)Triangular arbitrage path #1 yields a positive profit.Around the horn. Assuming the following quotes, calculate how a market trader at Citibank with \$1,000,000 can make an intermarket arbitrage profit.:National Westminster quote: euros/pound (€/£)Deutschebank quote: US\$/euro (\$/€)
Problem 6.20 Great PyramidsCitibank quotes U.S. dollar per Libyan dinar:\$1.9324/LYDNational Bank of Kuwait quotes Saudi riyal per Libyan dinar:SAR 1.9405/LYDBarclay quotes U.S. dollar per Saudi riyal:\$0.2667/SARAssumptionsExchange rateCitibank quote: US\$/dinar (\$/LYD)1.9324 National Bank of Kuwait quote: riyal per dinar (SAR/LYD)1.9405 0.2667 Initial investment\$ 1,000,000.00 Path #1: US\$ to riyals to dinars to US\$Start with US\$\$ 1,000,000.00 Convert to riyals at Barclay quoteSAR 3,749,953.13Convert riyals to dinars at NatBank of Kuwait quoteLYD 1,932,467.47Convert dinars to US\$ at Citibank quote\$ 3,734,300.14 Arbitrage gain (loss)\$ 2,734,300.14 Path #2: US\$ to dinars to riyals to US\$