Hi guys,

I’m struggling on a concept checker in the Schweser book 1, p. 315, q. 13. I obviously get the same result when starting by selling vs. GBP. But fail to do so, when initially selling vs. EUR. I just don’t get it…

I start by selling the USD 1mn versus EUR at 0.7, which leaves me with EUR 700k. Then proceed by selling the EUR vs. GBP at 1.201 which gives GBP 582,8k. Finally exchanging back to USD at 1.7, equalling 990.8k. So according to my way, I’d be left with a negative arbitrage.

Can anyone spot my mistake? I assume one should get the same result no matter how you work up the triangle…