Blade Case Study Determine if Locational Arbitrage is possible or not

Ultimate goal? Determine if Locational Arbitrage is possible or not. State whether yes or no.

Step 1): Buy Thai Bath from Minzu Bank

Step 2) Sell Thai Bath to Sobat Bank

Step 3) Determine the Dollar Profit/Loss

Question 2:

Ultimate goal? Determine if Triangular Arbitrage is possible or not. State whether yes or no.

Step 1)Exchange dollars for Thai baht

Step 2) Convert the Thai baht into Japanese yen

Step 3) Convert the Japanese yen into dollars

Step 4) Determine the Dollar Profit/Loss

Question 3:

Ultimate goal? Determine if Covered Interest Arbitrage is possible or not. State whether yes or no.

Step 1)On Day 1, convert U.S. dollars to Thai baht and set up a 90-day depositaccount at a Thai bank

Step 2) In 90 days, the Thai deposit will mature to ……fill in………which is the amount to be sold forward

Step 3) In 90 days, convert the Thai baht into U.S. dollars at the agreed-upon rate

Step 4) Dollar amount available on a 90-day U.S. deposit

Step 5) Dollar profit over and above the dollar amount available on a 90-day U.S. deposit