Question
Mary Brown, a currency trader, wants to take advantage of possible price discrepancy in the foreign exchange market. She watched the ticker tape on her
Mary Brown, a currency trader, wants to take advantage of possible price discrepancy in the foreign exchange market. She watched the ticker tape on her computer and saw the following quotes.
Capital = $1,000,000
Germany ask price quotation: $/€ = $0.8600
Singapore bid price quotation S$/€ = S$2.00
U.S bid price quotation: $/S$ = $0.5500
Is there a triangular currency arbitrage opportunity? If so, how much will Mary Brown gain?
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International Financial Management
Authors: Geert Bekaert, Robert J. Hodrick
2nd edition
013299755X, 132162768, 9780132997553, 978-0132162760
