The Yen/dollar Exchange Rate Is ¥120 = $1 in London

question 65

Multiple Choice

The yen/dollar exchange rate is ¥120 = $1 in London and ¥123 = $1 in New York at the same time. What is the net profit if a dealer takes $1,000,000 to purchase ¥123,000,000 in New York and engages in arbitrage by selling it in London?

• A) $34,000
• B) $20,390
• C) $25,000
• D) $46,666
• E) $39,454

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