Explain the steps that would reflect triangular arbitrage

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1. Triangular arbitrage. Explain the concept of trian- gular arbitrage and the scenario necessary for it to be plausible.

2. Triangular arbitrage. Assume the following information:

 

Quoted Price

 

£0.60

Value of New Zealand dollar in British pounds

£0.20

Value of Canadian dollar in New Zealand dollars

NZ$3.02

Given this information, is locational arbitrage possible? If so, explain the steps involved in locational arbitrage, and compute the profit from this arbitrage if you had £1 000 000 to invest. What market  forces

Given this information, is triangular arbitrage possible? If so, explain the steps that would reflect triangular arbitrage, and compute the profit from this strategy if you had £1 000 000 to invest.

What market forces would occur to eliminate any further possibilities of triangular arbitrage?

Reference no: EM13935953

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