Solving a triangular arbitrage problem

This video shows you how to set up and solve a triangular arbitrage problem step by step. Triangular arbitrage opportunity arises when the quoted cross-rate is not aligned with the implied cross-rate obtained from dollar-exchange rates. The video shows you the transactions you can undertake and the profits you can make when a triangular arbitrage opportunity exists.
This video can serve as a supplement to Chapter 5 of International Financial Management textbook by Eun, Resnick, and Chuluun from McGraw-Hill.
Other relevant videos in the Exchange Rate Basics series:
- How exchange rates are quoted: • How exchange rates are...
- Computing cross exchange rates: • Calculating cross exch...
Other relevant playlists:
- Arbitrage Opportunities in the Foreign Exchange Market
- Hedging Foreign Exchange Risk