Thomas , a currency trader in East African Community, has ksh 400,000. He wishes to assess if triangular arbitrage by moving to Uganda, and Tanzania. The exchange rate quotes from the currency convertor was:  32TZ/1 KES  20UGH/IKES

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Chapter29: Exchange Rates And International Capital Flows
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Thomas , a currency trader in East African Community, has ksh 400,000. He wishes to assess if triangular arbitrage by moving to Uganda, and Tanzania. The exchange rate quotes from the currency convertor was:

  •  32TZ/1 KES
  •  20UGH/IKES

Agreed exchange rate between Uganda shillings and Tanzania shilling was 1.5 UGH /1TZ

Compute the cross exchange rate and triangular arbitrage profit. 
Explain your answer.

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