What is the impact of triangular arbitrage on quotes above

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Reference no: EM131332274

National bank quotes the following for the British pound and the new Zealand dollar: Quoted Bid Price Quoted Ask Price Value of an British pound ( £ ) in $ $1.61 $1.62 Value of a New Zealand dollar (NZ$) in $ $.55 $.56 Value of a British pound in New Zealand dollars NZ$2.95 NZ$2.96 What is the impact of triangular arbitrage on the quotes above? Clearly state which quotes will increase or decrease. Clearly state whether each quote is a bid or ask price. b. National Bank quotes the following for the British pound and the Australian dollar: Quoted Bid Price Quoted Ask Price Value of an British pound ( £ ) in $ $1.61 $1.62 Value of an Australian dollar (A$) in $ $.85 $.86 Value of an Australian dollar in British pounds £0.54 £ 0.55 Calculate the cross rates for the British pound (£) in $, both bid and ask. Of the six trades available above, which three trades result in a profit?

Reference no: EM131332274

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