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Triangular arbitrage

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Reference no: EM131904274

Three Exchange Rates are as follows: 1) US Dollars (USD) to Canadian Dollars (CAD) at CAD 1.05 to USD 1 2) CAD to Euros (EUR) at CAD 1 to EUR 1 3) EUR to USD at EUR 0.72 to USD 1 Suppose you start with USD 100,000, and do one round of "triangular arbitrage", that is convert make a total of 3 foreign exchange transactions to start from USD and return to USD. What will be your profit in USD? (Note: Profit will be Final USD amount - $100,000. There are not transaction costs.)

Reference no: EM131904274

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