Question
Triangular Arbitrage Assume the following information: Quoted Price Value of British pound in U.S. dollar $1.30 Value of New Zealand dollar in U.S. dollar $.65
- Triangular Arbitrage Assume the following information:
Quoted Price
Value of British pound in U.S. dollar $1.30
Value of New Zealand dollar in U.S. dollar $.65
Value of British pound in New Zealand dollar NZ$1.98
Given this information, is triangular arbitrage possible? If so, explain the steps that would reflect triangular arbitrage, and compute the profit from this arbitrage if you had $1 million to use. What market forces would occur to eliminate any further possibilities of triangular arbitrage?
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Authors: Kristina Ellis
1st Edition
1617951579,1617951730
