Question
Suppose you observe the following quotes between pesos (MP), euros () and dollars ($) in the FX market: MP10/ , $1.25/ ACR: MP8.5/$ Find the
Suppose you observe the following quotes between pesos (MP), euros () and dollars ($) in the FX market:
MP10/ , $1.25/ ACR: MP8.5/$
Find the maximum triangular arbitrage profit (in terms of euros) to someone with access to 20 million euros at a 2% interest rate. Round intermediate steps to four decimals and your final answer to two decimals.
Correct answer 850,000
Please show formula and steps used
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
