Assume that there is no transaction cost and you observe the following quotation: 1. HKD: USD...
Assume that there is no transaction cost and you observe the
following quotation:
1. HKD: USD 0.1250
2. USD: JPY 116.20
3. JPY: HKD 0.062
Which is the correct way to conduct Triangular Arbitrage?
If you start with $1,000,000, after 1 round of Triangular Arbitrage, how much USD will you have (your capital Plus your profit)?
Homework Answers
Arbitrage profit is $110,432.51
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Assume that there is no transaction cost and you observe the
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1. HKD: USD...
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