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Suppose the following bilateral spot exchange rates are being quoted for the Danish krone (DKK), the US dollar (US$) and the euro (): US$/ =

Suppose the following bilateral spot exchange rates are being quoted for the Danish krone (DKK), the US dollar (US$) and the euro ():

US$/ = 1.5

DKK/ = 7.0

DKK/$ = 5.0

If you start with 100,

a) Can you profit with triangular arbitrage?

b) Calculate the profit (in euro) in part (a).

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