How do you know which order to convert things in? On one of the CFAI samples, I kept getting a loss, however, when I tried things in a different order I got the answer… is there a way to know (aside from trial and error) which order to go 'round the triangle?
Not really. Just try it one way and if you get a loss, then go the other way around the triangle. No tricks that I have heard of.
If you lay out the triangle and go around, but get a loss it means that arb is possible. Go back to the starting point and go the opposite direction and you’ll get the gain (NOTE: do NOT just take the loss amount and assume it is the possible arb amount…it is close, but not correct. Start over and go the other way).
OK, thanks… with the time pressure of the exam just want to be aware of any tricks/shortcuts…
Up the bid, down the ask…such a beautiful thing, ain’t it.