Which of the Following Is an Example of Triangular Arbitrage

question 71

Multiple Choice

Which of the following is an example of triangular arbitrage initiation?

• A) Buying a currency at one bank's ask and selling at another bank's bid, which is higher than the former bank's ask.
• B) Buying Singapore dollars from a bank (quoted at $0.55) that has quoted the South African rand (ZAR)/Singapore dollar (S$) exchange rate at ZAR2.50 when the spot rate for the South African rand is $0.20.
• C) Buying Singapore dollars from a bank (quoted at $0.55) that has quoted the South African rand/Singapore dollar exchange rate at ZAR3.00 when the spot rate for the South African rand is $0.20.
• D) Converting funds to a foreign currency and investing the funds overseas.

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