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Suppose that Cloudastries Bank is a U.S.-based financial intermediary that serves the foreign exchange market. Assume that this bank is willing to both purchase and

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Suppose that Cloudastries Bank is a U.S.-based financial intermediary that serves the foreign exchange market. Assume that this bank is willing to both purchase and sell currency for the same rate. In other words, assume there is no bid/ask spread. Suppose Cloudastries has made the following direct quotations: Currency Mexican Peso Dollar Spot Rate $0.50 $1.50 Euro Additionally, Cloudastries has quoted a cross exchange rate of 1 euro = 3.03 pesos. After exchanging dollars for euros, the next step in triangular arbitrage is to exchange those euros for pesos. If you use all 6,666.67 to purchase pesos from Cloudastries, you would receive pesos

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