Page 16 - Demo

%u062c%u0645%u064a%u0639 %u0627%u0644%u062d%u0642%u0648%u0642 %u0645%u062d%u0641%u0648%u0638%u0629 %u0640 %u0627%u0625%u0644%u0639%u062a%u062f%u0627%u0621 %u0639%u0649%u0644 %u062d%u0642 %u0627%u0645%u0644%u0624%u0644%u0641 16 %u0628%u0627%u0644%u0646%u0633%u062e %u0623%u0648 %u0627%u0644%u0637%u0628%u0627%u0639%u0629 %u064a%u0639%u0631%u0636 %u0641%u0627%u0639%u0644%u0647 %u0644%u0644%u0645%u0633%u0627%u0626%u0644%u0629 %u0627%u0644%u0642%u0627%u0646%u0648%u0646%u064a%u0629The value of EGP/ UAE dirham= $%ud835%udfce%ud835%udfce.%ud835%udfd0%ud835%udfd0%ud835%udfd5%ud835%udfd5 / $%ud835%udfce%ud835%udfce.054 = 5 EGP/UAE dirhamHow can we use the arbitrage to get profits from Cross Rates?Example:Suppose that three banks post the following exchange rates:HSBCS ($/%u20ac) =1.11%u20ac$AhliS (EGP/%u20ac) =20CIBS ($/EGP) =0.054EGPFirst, we will calculate the implied cross rates to see if there is an arbitrage opportunity exists or not.The implied S(EGP/%u20ac) cross rate is S((EGP/%u20ac) = $1.11 / $%ud835%udfce%ud835%udfce.054= 20.56 EGP/%u20acAhli Bank has posted a quote of S (EGP/%u20ac) =20, so there is an arbitrage opportunity.So, how can we make profits?1. Sell EGP100,000 for S (EGP/%u20ac) =100,000/20 receive 5000 %u20ac2. Sell 5000%u20ac for S ($/%u20ac) =5000%u20ac%u00d71.11 receive 5550 $3. Sell 5550$ for S ($/EGP) =5550$/0.054 receive 102,778 EGP profit per round exchange = EGP 102,778- EGP100,000= 2,778 EGP