Make a profit through triangular arbitrage

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Given the following exchange rates GBP/ARS 19.5, GBP/USD 1.3 and USD/ARS 14.25, conclude the following;

a. Calculate whether any profit can be made through triangular arbitrage.

b. If it were possible to make a profit through triangular arbitrage what would be the implications for the financial marketplace and the role of arbitrage.

c. If the 180-day forward rate for the dollar were GBP/ARS 21.45 what does this tell you about inflation in Agentina, explain your assumptions and the link with the concept of arbitrage.

Reference no: EM131680839

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