Using the Japanese Yen and the British Pound and US Dollars, write a short paper explaining if a profit can be accomplished using triangular arbitrage methods. Explain your answer by also using a diagram similar to the ones on pages 214 and 215 of the text book. Your paper must identify the possible ways you can do a transaction using triangulation methods from Bank A to Bank C or whatever possibilities you deem exist. Your final answer should identify what the arbitrage profit or loss is. Explain each step in your analysis. Your paper should be no longer than 3 to 4 pages.

Bank A is offering 82 Yen per dollar.

Bank B is offering $1.60 per British Pound

Bank C is offering 128 Yen per British Pound.

If you have 100,000,000 Yen, can you make a triangular profit? The quoted cross rate is the Yen per British Pound.

Identify the paths you would take to make a profit and the path that would yield a loss instead of a profit.

Which banks would you do your sell and buy transactions with?

Your paper should be a Word document 3 - 4 pages in length (excluding cover and reference pages).