Suppose $1 = 10.5 pesos in New York and $1 = 9.6 pesos in Mexico City. If you had $10,000 using arbitrage, your profits would be: Question 5 Answer a. $937.50. b. 937 pesos. c. 9600 pesos. d. $790.

To answer this question, we need to understand the concept of arbitrage. Arbitrage is the practice of taking advantage of a price difference between two or more markets. In this case, the markets are New York and Mexico City, and the commodity is the peso.

Here are the steps to calculate the profit:

1. First, convert the $10,000 to pesos in New York. Since$1 equals 10.5 pesos in New York, $10,000 would be 10,000 * 10.5 = 105,000 pesos.

2. Then, take these 105,000 pesos to Mexico City and convert them back to dollars. Since $1 equals 9.6 pesos in Mexico City, 105,000 pesos would be 105,000 / 9.6 =$10,937.50.

3. The profit is the difference between the amount of money you end up with and the amount you started with. So, $10,937.50 -$10,000 = $937.50.

So, the correct answer is:

a. $937.50.