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Part II: Triangular Arbitrage The quotations of exchange rates of US dollars, British pound, and the...

Part II: Triangular Arbitrage The quotations of exchange rates of US dollars, British pound, and the New Zealand dollar in National Bank is as below. ​ Quoted Bid Price Quoted Ask Price USD/GBP 0.65 0.66 NZD/USD 0.50 0.52 GBP/NZD ​2.72 ​2.75 Is the triangular arbitrage feasible? If yes, how much is the triangular arbitrage profit when you have $500,000 to invest. If no, please explain why

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Answer #1

Answer is yes arbitrage possible and profit = $29773.25

Additional note : in answer I said USD / GBP is underpriced - beacuse of this I have started selling USD using quote 2 and not quote 1.

Bocz it is underpriced I have buy USD in last step.

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