Suppose you are a customer in the FX market and observe the following quotes for FX spot trades of JPY vs. the USD, USD vs. the EUR and JPY vs. the EUR with three dealers A, B and C: Dealer Currency...


Suppose you are a customer in the FX market and observe the following quotes for FX spot trades of<br>JPY vs. the USD, USD vs. the EUR and JPY vs. the EUR with three dealers A, B and C:<br>Dealer<br>Currency Pair<br>Bid<br>Ask<br>S(USD/EUR)<br>1.1074<br>1.1099<br>S(UPY/USD)<br>121.00<br>121.15<br>C<br>SUPY/EUR)<br>133.85<br>133.95<br>At these rates:<br>O None of the other answers.<br>O There is no triangular arbitrage opportunity.<br>O There is an arbitrage opportunity and it involves buying JPY and selling EUR with dealer C.<br>O There is an arbitrage opportunity and it involves selling JPY and buying USD with dealer B.<br>O There is an arbitrage opportunity and it involves selling JPY and buying EUR with dealer C.<br>

Extracted text: Suppose you are a customer in the FX market and observe the following quotes for FX spot trades of JPY vs. the USD, USD vs. the EUR and JPY vs. the EUR with three dealers A, B and C: Dealer Currency Pair Bid Ask S(USD/EUR) 1.1074 1.1099 S(UPY/USD) 121.00 121.15 C SUPY/EUR) 133.85 133.95 At these rates: O None of the other answers. O There is no triangular arbitrage opportunity. O There is an arbitrage opportunity and it involves buying JPY and selling EUR with dealer C. O There is an arbitrage opportunity and it involves selling JPY and buying USD with dealer B. O There is an arbitrage opportunity and it involves selling JPY and buying EUR with dealer C.

Jun 04, 2022
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