Assume the Following Information Assume You Have $100,000 to Conduct Triangular Arbitrage

question 94

Multiple Choice

Assume the following information:
$\begin{array}{ll}&\text { Quoted Bid Price } & \text {Quoted Ask Price } \\\text {Value of an Australian dollar (AS) in \(\$\) } & \text { \$ 0.67 }&\text { \$ 0.69 } \\\text {Value of Mexican peso in \(\$\) } &\text { \$ .074 }&\text { \$ .077 } \\\text {Value of an Australian dollar in } && \\\text {Mexican pesos } &\text { 8.2 }&\text {8.5 } \\\end{array}$
Assume you have $100,000 to conduct triangular arbitrage. What will be your profit from implementing this strategy?

• A) $6,133
• B) $2,368
• C) $6,518
• D) $13,711

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Definitions:

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together, showing the relationship but not causation between them.

Causation

The relationship between cause and effect, where one event or action directly results in another.

Experiments

Systematic and scientific procedures carried out under controlled conditions to investigate a hypothesis or demonstrate a known fact.

Parental Support

The assistance and backing provided by parents to their children, which can be emotional, physical, or financial in nature.