Determine the chf exchange rate consistent

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Suppose the Swiss Franc is currently traded at CHF 0.89/$. The British Pound is traded at GBP 0.79/$. Ignoring transaction costs:

Problem a. Determine the CHF/GBP exchange rate consistent with these direct quotations.

Problem b. Suppose the CHF/GBP cross rate in the market was at CHF 1.05/GBP. Is there any arbitrage opportunity?

Reference no: EM132886121

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