Triangular Arbitrage Illustration 4
The following spot rates are observed in N.Y. Forex market-
DEM/USD 1.6345/50
JPY/USD 125.35/45
In the Frankfurt market the JPY/DEM spot rate is being quoted at 74.65/85.
Is there an arbitrage opportunity? What transaction have to executed to it, if there is?
(Ans.: (a) Cross Rate 76.6667/76.7513, Gain 24,271)
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