Determine your profit or loss

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Reference no: EM132907943

Problem - Profit from Triangular Arbitrage - The bank is willing to buy dollars for .9 euros per dollar. It is willing to sell dollars for .91 euros per dollar.

You can sell Australian dollars (A$) to the bank for $.72.

You can buy Australian dollars from the bank for $.74.

The bank is willing to buy Australian dollars (A$) for .68 euros per A$.

The bank is willing to sell Australian dollars (A$) for .70 euros per A$.

You have $100,000. Determine your profit or loss if you were to attempt triangular arbitrage by converting your dollars to Australian dollars, then converting Australian dollars to euros, and then converting euros to U.S. dollars.

Reference no: EM132907943

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