Suppose an investor observes the following spot quotes from the bank (assume the bid-ask spread is zero here):

 

Yen/$ = 115.86/$
Thai Baht/$ = TB 42.67/$ Yen/Bhat = Yen 2.68/Baht

 

If an investor has $1 million to apply toward Triangular arbitrage activities, would triangular arbitrage be profitable?

If so, what would be the profit?

Answer rating: 100% (QA)

To determine if triangular arbitrage would be profitable we need to compare the implie... View the full answer