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Is there an arbitrage opportunity

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Reference no: EM132813953

Triangular Arbitrage:

You observe the following spot exchange rate quotes:

Base Currency/Quote Currency                Bid                          Ask

HKD/KRW                                143.77           144.57

HKD/TWD                                3.6141           3.6149

KRW/TWD                                0.0252           0.0253

HKD, KRW, and TWD are the currency codes for the Hong Kong Dollar, South Korean Won, and the New Taiwan Dollar, respectively.

  1. Is there an arbitrage opportunity?
  2. Outline a step-by-step trading strategy to profit from such an opportunity without risk, if there is one.

Reference no: EM132813953

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