Assume the Following Information:​ Exchange Rate of Japanese Yen in U.S

question 26

Multiple Choice

Assume the following information:​ Exchange rate of Japanese yen in U.S.$
=
$) 011
Exchange rate of euro in U.S.$
=
$1) 40
Exchange rate of euro in Japanese yen
=
140 yen
​
What will be the yield for an investor who has $1,000,000 available to conduct triangular arbitrage?

• A) ​$100,000
• B) ​-$90,909
• C) ​10 percent
• D) ​-9.09 percent

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Definitions:

Thinking Outside

A creative thinking technique involving looking beyond conventional ideas and methods to solve problems.

Rubber

A stretchy, flexible material produced from the latex of certain plants or synthetically through petrochemical processes, used in various products, including tires and gloves.

Cement

A powdery substance made with calcined lime and clay that, when mixed with water, forms a paste that hardens and is used in building for bonding bricks or stones.

Traditional Thinking

A way of thinking that adheres to long-established practices, rules, or patterns, often resisting change or innovation.