Currently, you can exchange $1 for either ¥107.20 or €.7622 in New York. In Tokyo, the...
Currently, you can exchange $1 for either ¥107.20 or €.7622 in New York. In Tokyo, the exchange rate is ¥/€.0074. If you have $1,750, how much profit can you earn with triangle arbitrage?
Homework Answers
Steps for Triangular arbitrage are:
Convert Dollar into Yen and get 1,750*107.20 = Yen 187,600
Convert Yen into Euro and get 187,600*0.0074 = Euro 1,388.24
Convert Euro back into Dollar 1,388.24/0.7622 = $1,821.36
Arbitrage profit = 1,821.36-1,750
= $71.36
Add Answer to:
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