Swissie Triangular Arbitrage.The following exchange rates are available to you. (You can buy or sell at the
Question:
Swissie Triangular Arbitrage. The following exchange rates are available to you. (You can buy or sell at the stated rates.) Assume you have an initial
SF 11,000,000.
Can you make a profit via triangular arbitrage? If so, show the steps and calculate the amount of profit in Swiss francs (Swissies).
Mt. Fuji Bank | ¥93.83=$1.00 |
Mt. Rushmore Bank | SF 1.06=$1.00 |
Mt. Blanc Bank | ¥91.91=SF1.00 |
Question content area bottom
Calculate the first arbitrage opportunity attempt below:
Attempt Number 1: Start with SF to $
Step 1 : SF to $
$
Step 2: $ to yen
¥
Step 3: yen to SF
SF
Profit or Loss
Attempt Number 2: Start with SF to yen
Step 1 : SF to yen
¥
Step 2: yen to $
$
Step 3: $ to SF
SF
Profit or Loss
SF
Multinational Business Finance
ISBN: 978-0132743464
13th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett