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Trader X specializes in cross-rate arbitrage. She notices the following quotes in the FX market, NZD|$ = 1.6691, Swedish Krona SEKI$ = 10.923, NZD|SEK =
Trader X specializes in cross-rate arbitrage. She notices the following quotes in the FX market, NZD|$ = 1.6691, Swedish Krona
SEKI$ = 10.923, NZD|SEK = 0.1548.
- Ignoring transaction costs, does the trader have an arbitrage opportunity based on these quotes?
- If there is an arbitrage opportunity, what steps would she take to make an arbitrage profit, and how would she profit if she has $1,500,000 available for this purpose.
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