Assume That the Yen/dollar Exchange Rate Quoted in London at 3

Multiple Choice

Assume that the yen/dollar exchange rate quoted in London at 3 p.m.is $\times$ 120 = $1,and that the New York yen/dollar exchange rate at the same time is $\times$ 123 = $1.What will be the net profit if a dealer takes one million dollars to purchase $\times$ 123 million in New York and engages in an arbitrage trade?

A) $34,000
B) $24,390
C) $25,000
D) $46,666