Asked by Gargi Patil on Jun 18, 2024
Verified
Triangle arbitrage helps keep the currency market in equilibrium.
Triangle Arbitrage
A riskless profit strategy that takes advantage of discrepancies in exchange rates in different markets by conducting a series of conversions among three currencies.
Currency Market
Also known as the foreign exchange market (Forex), it's a decentralized global market where currencies are traded, determining the foreign exchange rates for every currency.
Equilibrium
A state where market supply and demand balance each other, and as a result, prices become stable.
- Understand the mechanism and purpose of triangle arbitrage in maintaining market equilibrium.
Verified Answer
Learning Objectives
- Understand the mechanism and purpose of triangle arbitrage in maintaining market equilibrium.
Related questions
Triangle Arbitrage Is a Profitable Situation Involving Three Separate Currency ...
The Current Spot Rate Is C$1 ...
Arbitrage Is Based on the Idea That ________ ...
Building a Zero-Investment Portfolio Will Always Involve ________ ...
Which of the Following Can Defeat the Profit-Maximizing Strategy of ...