If the direct rate for French francs (FF) is $.143 and the direct rate for Australian dollars (A$) is $.44, what must the cross rate between A$ and FF be to prevent triangular arbitrage?

Question

Quizplus · Accepted Answer

To prevent triangular arbitrage, the cross rate between A$ and FF should be calculated by dividing the direct rate of A$ by the direct rate of FF: 0.44 / 0.143 = 3.08 FF/A$.

If the Direct Rate for French Francs (FF) Is