Suppose 169 pound1 in new york and 171 pound1 in london


Suppose $1.69 = £1 in New York and $1.71 = £1 in London. How can foreign-exchange arbitragers profit from these exchange rates? Explain how foreign-exchange arbitrage results in the same dollar/pound exchange rate in New York and London. (£ represents British pounds).

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Business Economics: Suppose 169 pound1 in new york and 171 pound1 in london
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