Triangular Arbitrage Confusion
Hi Everyone! First time poster, glad to join the ranks. :)
Reading 13 EOC Question 15 is a triangular arbitrage problem with two dealers. One is told they have to convert pounds to pesos in order to pay an invoice. After all the calculations, you are left with the following:
Dealer A Bid/Ask = .0366/.0370
Dealer B Bid/Ask = .0366/.0372
The question asks if an arb op exists.
The solution to the problem states that there is no arb op because although one can purchase from Dealer A at a lower price, one must sell to both dealers at the same price.
My question is how is it not profitable to use fewer pounds to get the same amount of pesos regardless of the sales price?
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