Make a profit from triangular arbitrage

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Reference no: EM131449897

Alabama Bank is willing to buy or sell British pounds for $1.25. The bank is willing to buy or sell Mexican pesos at an exchange rate of 20 pesos per dollar. The bank is willing to purchase British pounds at an exchange rate of 1 peso = .05 British pounds. Show how you can make a profit from triangular arbitrage and what your profit would be if you had $100,000.

Reference no: EM131449897

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