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Compute the triangular arbitrage profit

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Assuming no transaction costs, suppose the Singapore dollar-U.S. dollar (S$/$) spot exchange rate is S$1.52/$, the Canadian dollar-U.S. dollar (CD/$) spot rate is CD1.24/$ and the Singapore dollar-Canadian dollar (S$/CD) spot rate is S$1.18/CD

A) Show the transactions you would need to take advantage of a triangular arbitrage opportunity.

B) Determine the triangular arbitrage profit that is possible if you have $1,000,000.

Reference no: EM132689031

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