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 quoted  
Computing cross exchange rates:    • Calculating cross exchange rates  

Other relevant playlists:
Arbitrage Opportunities in the Foreign Exchange Market
Hedging Foreign Exchange Risk