What is profit in usd

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Reference no: EM133110028

The USD to CAD (US dollar to Canadian dollar) exchange rate is: USD0.9700 for CAD1.

The CAD to JPY (Canadian dollar to Japanese Yen) exchange rate is: CAD1.0250 for JPY100.

The JPY to USD (Japanese Yen to US dollar) exchange rate is: JPY100 for USD1

You start by spending USD 100,000 to buy CAD and complete ONE round of triangular arbitrage by next purchasing JPY using all CAD you have, and finally purchasing USD using all JPY you have.

What is your profit in USD?

Assume transaction costs are zero. Note that you would not expect such mis-pricing (arbitrage opportunity) to exist for long in the market.

Reference no: EM133110028

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