Mary Brown, a currency trader, wants to take advantage of possible price discrepancy in the foreign exchange

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Mary Brown, a currency trader, wants to take advantage of possible price discrepancy in the foreign exchange market. She watched the ticker tape on her computer and saw the following quotes.

Capital = $1,000,000

Germany ask price quotation: $/€ = $0.8600

Singapore bid price quotation S$/€ = S$2.00

U.S bid price quotation: $/S$ = $0.5500

Is there a triangular currency arbitrage opportunity? If so, how much will Mary Brown gain?

Related Book For answer-question

International Financial Management

ISBN: 978-0132162760

2nd edition

Authors: Geert Bekaert, Robert J. Hodrick

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Posted Date: Oct 09, 2023 02:52 AM

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Mary Brown, a currency trader, wants to take advantage of possible price discrepancy in the foreign exchange

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Yes there is a triangular currency arbitrage opportunity Mary Brown can make a profit by buyi... View the full answer

International Financial Management

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