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Below are spot exchange rate quotes from three F/X dealers. Based on these F/X quotes, which of the following is a profitable triangular arbitrage trade?

Below are spot exchange rate quotes from three F/X dealers. Based on these F/X quotes, which of the following is a profitable triangular arbitrage trade?

Winken quotes the Japanese yen per USD exchange rate at 80 JPY per USD

Blinken quotes the euro at $1.20 per EUR

Nod quotes a cross rate of 98 JPY per EUR

  • Sell USD to Winken in exchange for JPY; then sell JPY and buy EUR from Nod; then sell EUR and buy USD from Blinken
  • Sell USD and buy EUR from Blinken; sell EUR and buy JPY from Nod; sell JPY and buy USD from WInken
  • There is no profitable triangular arbitrage trade.

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