Explain the two types of arbitrage

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Participants in the foreign exchange market include speculators and arbitragers.

Required:

USD1 = AUD1.3640

Briefly explain the two types of arbitrage?

What arbitrage strategy can be used if the following rates are observed in the market and what will be the risk free profit amount? Show all calculations.

USD1 = SGD1.3640

AUD1 = SGD 1.2410

Reference no: EM133062503

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