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6. Topic: Triangular Arbitrage Assume the following information: Value of Canadian dollar in U.S. dollars Value of New Zealand dollar in U.S. dollars Value of Canadian dollar in New Zealand dollars $0.90 $0.30 NZ$3.02 Given this information, is triangular arbitrage possible? If so explain the steps that would reflect triangular arbitrage, and compute the profit from this strategy if you had $11 million to use.

6. Topic: Triangular Arbitrage Assume the following information: Value of Canadian dollar in U.S. dollars Value of New Zealand dollar in U.S. dollars Value of Canadian dollar in New Zealand dollars $0.90 $0.30 NZ$3.02 Given this information, is triangular arbitrage possible? If so explain the steps that would reflect triangular arbitrage, and compute the profit from this strategy if you had $11 million to use.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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6. Topic: Triangular Arbitrage Assume the following information: Value of Canadian dollar in U.S. dollars Value of New Zealand dollar in U.S. dollars Value of Canadian dollar in New Zealand dollars $0.90 $0.30 NZ$3.02 Given this information, is triangular arbitrage possible? If so explain the steps that would reflect triangular arbitrage, and compute the profit from this strategy if you had $1 million to use.
Transcribed Image Text:6. Topic: Triangular Arbitrage Assume the following information: Value of Canadian dollar in U.S. dollars Value of New Zealand dollar in U.S. dollars Value of Canadian dollar in New Zealand dollars $0.90 $0.30 NZ$3.02 Given this information, is triangular arbitrage possible? If so explain the steps that would reflect triangular arbitrage, and compute the profit from this strategy if you had $1 million to use.
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