Below are spot exchange rate quotes from three F/X dealers. Based on these F/X quotes, which of
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Question:
Below are spot exchange rate quotes from three F/X dealers. Based on these F/X quotes, which of the following is a profitable triangular arbitrage trade?
Winken quotes the Japanese yen per USD exchange rate at 80 JPY per USD
Blinken quotes the euro at $1.20 per EUR
Nod quotes a cross rate of 98 JPY per EUR
- Sell USD to Winken in exchange for JPY; then sell JPY and buy EUR from Nod; then sell EUR and buy USD from Blinken
- Sell USD and buy EUR from Blinken; sell EUR and buy JPY from Nod; sell JPY and buy USD from WInken
- There is no profitable triangular arbitrage trade.
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Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
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