profil

You are welcome, JCM

beingthatguy,

My example is more specific version of triangular arbitrage problem where they ask to calculate the profit based on initial position in specific currency.

You are right. To verify if arbitrage possible you can start with any currency.
Btw, in problem without spreads you can stop as soon as the product of exchange rates is different from 1. More or less not important, the arbitrage is possible. If number is less than 1, the opposite direction will generate arbitrage.

In problem with spreads you have to be more careful, since combinations of exchange rates without arbitrage opportunity will result in product less than 1 no matter which way you rotate currencies (dealer keeps the difference between 1 and what you get). So you have to do it twice to confirm/reject presence of arbitrage opportunity if first time you get product less than 1.

Spanishesk,
I don't know how you do it, but I find it easy enough just plug numbers and see the result. You have 50% chance to get the direction right first time and calculation is fairly straightforward.