CMA Final · Strategic Financial Management · Digital Finance
A crypto-asset exchange quotes a token at Rs 2,50,000 in Mumbai and USD 3,100 on a global exchange. The spot rate is Rs 82 per USD. Ignoring transaction costs, how much is the arbitrage gain per token by buying on the cheaper market and selling on the dearer one?
The arbitrage gain is Rs 4,200 per token. The global price converts to Rs 2,54,200 at Rs 82 per USD, which exceeds the Mumbai price of Rs 2,50,000, so buying in Mumbai and selling abroad yields the difference.
- ARs 4,200Correct
- BRs 0
- CRs 5,000
- DRs 2,000
Explanation
Global price in rupees = 3,100 x 82 = Rs 2,54,200. Mumbai price is Rs 2,50,000. Buy in Mumbai, sell globally: gain = 2,54,200 - 2,50,000 = Rs 4,200. Rs 2,000 or Rs 5,000 are arbitrary mistakes.
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