The investment company has 1 million EUR to mobilize in the foreign exchange market for...
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The investment company has 1 million EUR to mobilize in the foreign exchange market for arbitrage opportunists. Today, you found the following quote:
EUR/USD 1.1234-65
CAD/USD 0.8509-80
EUR/CAD 1.3326-98
Can you use triangular arbitrage to generate a profit? If so, explain the order of the transactions that you would execute, and the profit that you would earn. If you cannot earn a profit from triangular arbitrage, explain why.
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