Question: Triangular arbitrage is an arbitrage strategy in the foreign exchange market, and involves taking advantage of exchange rate discrepancies amongst three different currencies in order
Triangular arbitrage is an arbitrage strategy in the foreign exchange market, and involves taking advantage of exchange rate discrepancies amongst three different currencies in order to make a profit, by starting with a nominal amount in a one currency and converting through three FX rates back to the original currency round robin An arbitrage profit loss occurs if the resultant amount back in the original starting currency is either greater lesser than the original starting amount.
Your group has Swiss Francs and observe the following exchange rates: a Mitsui Bank YenUS$ b Wells Fargo Bank SF US$ c Credit Swiss Bank YenSF
Analyze the above scenario to determine whether your group can make a Triangular Arbitrage.
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