triangular arbitrage and implied cross rates question examples, question, something, set

d2rockstar

Quick question, on p.489 in CFAi book in the second paragraph (2nd arbitrage constraint) they set the ratios so that to get a/c u need to have a/b and c/b….. but in all the examples its usually set up so that the relationship is a/c=(a/b)(b/c) and u can cancel out currency b (this is for questions without inverting) …. so  my question is: is the paragraph wrong? Or am i missing something? Sorry for any typos im on my tablet and it sucks to type

Kiakaha

If you changed your avatar I might actually be able to focus on your question.

jbaldyga

Incentive: answer my question and ill tell u her name? Lol

spartanag07

Well, I don’t have the books with me, but clearly you can’t cross multiply and cancel with the ratios you have stated.  You would have to take the inverse of C/B to get to B/C and cancel out the “B’s”.

cfalevel2011

jyk026 wrote:
Quick question, on p.489 in CFAi book in the second paragraph (2nd arbitrage constraint) they set the ratios so that to get a/c u need to have a/b and c/b….. but in all the examples its usually set up so that the relationship is a/c=(a/b)(b/c) and u can cancel out currency b (this is for questions without inverting) …. so  my question is: is the paragraph wrong? Or am i missing something? Sorry for any typos im on my tablet and it sucks to type
…you have a tablet?…showoff!