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2 . You go to a bank and are given these quotes: You can buy a euro for 1 4 pesos. The bank will pay
You go to a bank and are given these quotes:
You can buy a euro for pesos.
The bank will pay you pesos for a euro.
You can buy a US dollar for euros.
The bank will pay you Euros for a US dollar.
You can buy a US dollar for pesos.
The bank will pay you pesos for a US dollar.
You have $ Can you use triangular arbitrage to generate a profit? If so explain the order of the transactions that you would execute, and the profit that you would earn. If you cannot earn a profit from triangular arbitrage, explain why.
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