Solved: Suppose you start with usd 100000 and do one round of, Finance Basics

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Suppose you start with usd 100000 and do one round of

Three Exchange Rates are as follows:

1) US Dollars (USD) to Canadian Dollars (CAD) at CAD 1.05 to USD 1

2) CAD to Euros (EUR) at CAD 1.10 to EUR 1

3) EUR to USD at EUR 0.9 to USD 1

Suppose you start with USD 100,000, and do one round of "triangular arbitrage", that is convert make a total of 3 foreign exchange transactions to start from USD and return to USD. What will be your profit in USD?

(Note: Profit will be Final USD amount - $100,000. There are not transaction costs.)

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Finance Basics: Suppose you start with usd 100000 and do one round of

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