Assume that you can buy 245 Canadian dollars with 100 British pounds.How much profit can you earn on a triangle arbitrage given the following rates if you start out with 100 U.S.dollars?
$\begin{array}{|l|l|l|}
\hline
\text { Country } & \text { U.S. } \$ \text { Equivalent } & \text { Currency per U.S. \$ } \
\hline \text { Canada }&? & 1.3500\
\hline
\end{array}$

Question

Quizplus · Accepted Answer

The correct answer is A because the profit is $0.86.100 British pounds = 245 Canadian dollars245 Canadian dollars = 181.48 U.S. dollars (181.48/100 = 1.8148)100 U.S. dollars = 135 Canadian dollars (135/100 = 1.35)135 Canadian dollars = 100 British pounds (100/135 = 0.7407)100 British pounds = 181.48 U.S. dollars (181.48/100 = 1.8148)Profit = 1.8148 - 1 = $0.86

Assume That You Can Buy 245 Canadian Dollars with 100