Locational Arbitrage

# Locational Arbitrage - Convert \$100000 into Baht at the...

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Bid Ask Mizu bank Baht in \$ \$0.0224 \$0.227 Yen in \$ \$0.0085 \$0.0086 Baht in Yen ¥2.69 ¥2.7 Sobat Bank Baht in \$ 0.02 0.02 1 Exchange \$100000 to Baht at \$0.0227 \$100000/\$0.0227 = \$4,405,286.34 Sell \$4405286.34 to Sobat Bank at the bid rate \$0.0228 \$4405286.34*\$0.0228 = \$100,440.528 Profit = \$100440.528-\$100000 = \$440.53 2 Exchanging \$100000 in order to obtain maximum profit
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Unformatted text preview: Convert \$100000 into Baht at the \$0.0227 \$100000/\$0.0227 = \$4,405,286.34 \$4405286.34*¥2.69 = ¥1185022.0.2 Convert ¥1185022.01 into \$ at the ask rate of \$0.0085 ¥11850220.2*\$0.0085 = \$100,726.87 Hence Profit = \$100726.87-\$100000 = \$726.87 Sell \$440528.63 to Mizu bank for Yen at bid price ¥ 2.69...
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## This note was uploaded on 02/22/2011 for the course FIN 535 taught by Professor Edward during the Spring '11 term at Chaminade University.

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