How an investor can make a profit from triangular arbitrage

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Reference no: EM132652301

Problem 1: Melbourne bank is willing to buy or sell AUD for MYR2.8300. The bank is willing to buy or sell NZ$ at an exchange rate of NZ$1.0600/AUD. The bank is willing to purchase British pounds at an exchange rate of NZ$1 = MYR2.6900. Calculate how an investor can make a profit from triangular arbitrage with investment of AUD500.

Select one:

a. AUD5.78

b. AUD503.78

c. AUD3.78

d. No triangular arbitrage profit

Reference no: EM132652301

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