Question: Given the FX rates below determine if the triangular arbitrage is possible by calculating the cross rate of /. HSBC /$ 119.8660 126.1249 Citi /

  1. Given the FX rates below determine if the triangular arbitrage is possible by calculating the cross rate of /.

HSBC

/$

119.8660

126.1249

Citi

/

164.0000

187.0000

Discover

$/

1.4057

1.5064

Answer: 168.4956

  1. Using same set of quotes above and assuming you have $1,000,000 to trade, calculate the triangular arbitrage profit/loss, by going first to Yen.

Answer: $27,412

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