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Old 02-24-2008, 12:36 PM  
Rhesus
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Join Date: Aug 2004
Posts: 2,009
Quote:
Originally Posted by TheAgent View Post
if you have large amount of money you can do currency arbitrage

For example:
if $1.00 in U.S. currency buys 0.7 British pounds currency
£1 in British currency buys 9.5 French francs
1 French franc buys 0.16 in U.S. dollars, then an arbitrage trader can start with $1.00 and earn

1 x 0.7 x 9.5 x 0.16 = 1.064 dollars which means profit of 6.4 percent.
Also, for your information, the French franc has not existed for years. Ever heard of the Euro?
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