Suppose you observe S0(SEK/$) = SEK10.00/$. You have ¥1,000. Can you earn an arbitrage profit? If yes, show the steps involved in taking advantage of the arbitrage opportunity and calculate your profit in yen. Assume that there are no transactions costs.
The question belongs to Finance and it discusses about Swedish Krona compared to Dollar and earning arbitrage profit and its advantages and disadvantages.
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