Using Currencies A,B,and C Construct an Example in Which Triangle

question 35

Essay

Using currencies A,B,and C construct an example in which triangle arbitrage exists and then show how to exploit it.

---

Definitions:

Optimal Point

The most favorable or advantageous condition or value of a variable determined within a given set of constraints.

Marginal Benefits

The added pleasure or value that comes from the additional consumption or production of a good or service unit.

Marginal Costs

The supplementary cost involved in the production of one more unit of a product or service.

Production Possibilities Curve

A graph that shows the maximum number of possible units of two commodities that a economy can produce with available resources and technology.