Assume you can exchange $1 for either £1 or ? .50 in the U.S.In the London market,you can exchange £1 for ?
)52.This situation creates an opportunity to profit immediately
From which one of the following?

Question

Quizplus · Accepted Answer

Triangle arbitrage involves exploiting a pricing discrepancy between three currencies in order to make a profit. In this case, one can use the exchange rates of USD/GBP and USD/other currency to calculate the implied exchange rate of GBP/other currency. If the currency exchange rate in London market differs from the implied exchange rate, then one can use the opportunity to make a profit.

Assume You Can Exchange $1 for Either £1 or