Mr.Abdullah specializes on Arbitrage trading. He has got the following quotes regarding 3 currencies GBP 0.739541 / USD AUD 1.3081 / USD GBP 0.563789 / AUD Now he wants to use USD 1000000 and make a profit. Answer the following questions based on the data given above.

Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter4: Going Into Debt
Section: Chapter Questions
Problem 29AA
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Mr.Abdullah specializes on Arbitrage trading. He has got the following quotes regarding 3 currencies

GBP 0.739541 / USD

AUD 1.3081 / USD

GBP 0.563789 / AUD

Now he wants to use USD 1000000 and make a profit.

Answer the following questions based on the data given above. 

 

After converting from USD to GBP and from GBP to AUD, How much will he get in converting AUD  to USD in the above process?

a.

1715879

b.

1002777.804

c.

739541

d.

All the options are wrong 

e.
1311733.645
 

After converting from USD to GBP, How much will he get in converting GBP to AUD?

a.

739541

b.

1002777.804

c.

416945

d.

None

e.

1311733.645

 

How much will he get in converting USD 1000000 to GBP?

a.

1311733.645

b.

1002777.804

c.

None

d.

739541

e.

1352190

 

Which cross rate  should he calculate and compare with actual quotes to make sure that he will get  profit

a.

GBP/AUD

b.

USD/AUD

c.

AUD/USD

d.
GBP/USD
e.

None

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