Solved: Possibilities of triangular arbitrage, Finance Basics

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Possibilities of triangular arbitrage

Problem:

Assume the following information

Value of Canadian dollar in U.S. dollars $.90
Value of New Zealand dollar in U.S. dollars $.30
Value of Canadian dollar in New Zealand dollars NZ$3.02

Given this information , is triangular arbitrage possible? If so, explain the steps that would relect triangular arbitrage, and compute the profit from this strategy if you had $1,000,000 to use.

What market forces would occur to eliminate any further possibilities of triangular arbitrage?

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Finance Basics: Possibilities of triangular arbitrage

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