FOR THE WHOLE HOMEWORK, YOU CAN USE 4 NUMBERS AFTER DECIMAL PLACE IN YOUR CALCULATION.
Use the following 3 quotations for the following 3 questions on triangular arbitrage
Quotation 1: AUD: USD0.74942
Quotation 2: HKD: USD0.12896
Quotation 3: HKD: AUD0.1800
1. From quotation 1 and 2, what is the crossed rate for
HKD1 in AUD
2. What is the complete trading direction to conduct triangular
arbitrage in this situation?
A. USD ==> AUD ==> HKD | |
B. HKD ==> USD ==> AUD | |
C. USD ==> AUD ==> HKD ==> USD | |
D. HKD ==> USD ==> AUD ==> USD | |
E. AUD ==> USD ==> HKD ==> AUD | |
F. AUD ==> HKD ==> USD ==> AUD |
3. If you start with USD 1 million and follow 1 round of arbitrage, how much in USD do you end up with (including your investment of 1 million)
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