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Mathematics, 29.06.2020 18:01 ella5916

3. Suppose the Kenyan shilling (KS) is currently traded at KS 1.4/$.The Ethiopian Birr (EB) is traded at E B1.39/$.Ignoring transaction costs: A. Determine the KS/EB exchange rate consistent with these direct quotations. B. Suppose the KS/EB exchange rate in the market was at KS1.05/EBIs there any arbitrage opportunity? C. How would you take advantages of any arbitrage situation? D. What is your profit?

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3. Suppose the Kenyan shilling (KS) is currently traded at KS 1.4/$.The Ethiopian Birr (EB) is trade...

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