Question
A EUR-based foreign currency trader observed the following quotes: EUR/JPY=.0069 GBP/EUR=.8241 GBP/JPY=.0059 What steps should he take to make arbitrage profit? What is the impact
A EUR-based foreign currency trader observed the following quotes:
EUR/JPY=.0069
GBP/EUR=.8241
GBP/JPY=.0059
What steps should he take to make arbitrage profit? What is the impact of his arbitrage on EUR/JPY quote? What EUR/JPY quote will eliminate arbitrage opportunity?
Please show all steps/work where possible!!!
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Inside And Outside Liquidity
Authors: Bengt Holmstroem, Jean Tirole
1st Edition
0262518538, 9780262518536
