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The Nigerian naira versus the US dollar is 7 to 1, i.e., 7 naira buy one dollar. The ER between the Swiss franc and the
The Nigerian naira versus the US dollar is 7 to 1, i.e., 7 naira buy one dollar. The ER between the Swiss franc and the US dollar is one Swiss franc to 1.1 US $. Finally, the naira trades 7.02 per one Swiss franc. What kind of triangular arbitrage will induce the highest profit for you? Assume you start with $1 million, or the equivalent of it in the other currencies. (Note we are asking for the highest profit and not any profit.)
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