Quick question, on p.489 in CFAi book in the second paragraph (2nd arbitrage constraint) they set the ratios so that to get a/c u need to have a/b and c/b… but in all the examples its usually set up so that the relationship is a/c=(a/b)(b/c) and u can cancel out currency b (this is for questions without inverting) … so my question is: is the paragraph wrong? Or am i missing something? Sorry for any typos im on my tablet and it sucks to type
If you changed your avatar I might actually be able to focus on your question.
Incentive: answer my question and ill tell u her name? Lol
Well, I don’t have the books with me, but clearly you can’t cross multiply and cancel with the ratios you have stated. You would have to take the inverse of C/B to get to B/C and cancel out the “B’s”.
…you have a tablet?..showoff!