Which currency to borrow/sell. currency, problems, question, always, borrow

segalm

This has always given me problems and I am a retaker.


When you are doing a question where there is an arbitrage oppurtunity, currency forwards etc. Can some one please explain how do you know which currency to borrow or sell.

I can calculate the arbitrage profit from there but I am always clueless on when to borrow/sell.

An answer will be greatly appreciated as this will also clear up some covered arbitrage issues in econ as well.