how much arbitrage (guaranteed risk-free) profit can you make.

i need help with this problem i know the answer is 5.86 i just need help on how to do it step by step

Suppose that a commercial bank's current quote for transactions involving the United States dollar is A$1.3214 A$1.3298. (a) State the ask and bid prices for the bank. (b) Calculate the bid/ask spread for the bank.

Please Help The Swiss Franc is trading at 1.1464 $/ SFr, the euro is trading at 1.0828 $/euro. If you can buy or sell SFr/euro at 0.9451, is there an arbitrage? If so, how much can you make with one round - trip using $1,000,000 ? Please Help

An international pension fund manager, uses the concepts of purchasing power parity (PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:       Base price level   100   Current U.S. price level   105   Current South African price level   111   Base rand spot exchange rate $ 0.194   Current rand spot exchange rate $ 0.177   Expected annual U.S. inflation   7 % Expected annual South African inflation   5 % Expected U.S. one-year interest rate   10 % Expected South African one-year interest rate   8 %   Calculate the following exchange rates (ZAR and USD refer to the South African rand and U.S. dollar, respectively):  a. The current ZAR spot rate in USD that would have been forecast by PPP. (Do not round intermediate calculations. Round your answer to 4 decimal places.)     b. Using the IFE, the expected ZAR spot rate in USD one year from now. (Do not round intermediate calculations.…

A friend of yours tells you that in Japan a specific Japanese treasury note matures for $1000 in two years can be bought or sold for $925. What is the annualized risk-free rate in this example? ) You happen to notice the same security can be purchased or sold domestically for $945, how do you arbitrage this position? How many times should you make this trade? How likely is it that your friend’s information is current and correct?

If the U.S. interest rate is higher than the U.K. interest rate, will the U.K. investors place short-term funds in the U.S.? Explain. Assume the investment is covered. If the rate of inflation in the European Union (EU) is above the rate of inflation in the U.S., by 4 percentage points and the dollar depreciates against the euro by 5% during the same time period, what is expected to happen to the real exchange rate?  The e exchange rate is defined as the dollar price of euro($/€).