international finance

Assume that there is no transaction cost and you observe the following quotation:
1. USD/HKD: 0.1250
2. JPY/USD: 116.20
3. HKD/JPY: 0.062
From the 1st and 2nd quotations, what is the cross rate for HKD/JPY

Assume that there is no transaction cost and you observe the following quotation:
1. USD/HKD: 0.1250
2. JPY/USD: 116.20
3. HKD/JPY: 0.062

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

**********

If you have HKD1,000,000 and you try triangular arbitrage, what is the profit of 1 round arbitrage in HKD?

Assume that there is no transaction cost and you observe the following quotation:
1. USD/HKD: 0.1250
2. JPY/USD: 116.20
3. HKD/JPY: 0.062

Due to the triangular Arbitrage trade, what of the following will happen in the foreign exchange market?

A. USD/HKD will decrease from the current level of 0.1250

B. JPY/USD will decrease from the current level of 116.20

C. HKD/JPY will increase from the current level of 0.062

D. All of the above will happen