Suppose you observe the following quotes: London - $1.5/ New York - 1.2/$ Amsterdam - 2.0/...
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Suppose you observe the following quotes: London - $1.5/£ New York - €1.2/$ Amsterdam - €2.0/£ Is there a Triangular Arbitrage opportunity? If so, how can you make money if you were an American investor with $1000 to invest? What is the percentage return on capital for the American investor if there was a profit? What about if you were a British investor with £500? Suppose you observe the following quotes: London - $1.5/£ New York - €1.2/$ Amsterdam - €2.0/£ Is there a Triangular Arbitrage opportunity? If so, how can you make money if you were an American investor with $1000 to invest? What is the percentage return on capital for the American investor if there was a profit? What about if you were a British investor with £500?
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To determine if there is a Triangular Arbitrage opportunity we need to check if the cross exchange r... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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