1. judgment: convert the three markets into the same pricing method (if the two markets are directly priced, it can be converted into direct pricing):

New york foreign exchange market: 1 = 1.3250 USD.

London foreign exchange market:1hkd =110.6665.

Hong Kong foreign exchange market: 1 USD = 7.85438+00 HKD.

Exchange rate multiplication:1.3250 *110.6665 * 7.8210 = 0.9715.

Doesn't mean there is an arbitrage opportunity.

2. Arbitrage process: the exchange rate is multiplied by less than 1, and arbitrage is carried out in pounds: it can be converted into Hong Kong dollars in the London market, then converted into US dollars in the Hong Kong market, and then converted into pounds in the new york market, minus the arbitrage investment, the arbitrage income per pound:

1 * 10.6665/7.826 1/ 1.3250- 1 = 0.02863.

If it is dollar arbitrage, it can be converted into pounds in new york market, then into Hong Kong dollars in London market, and then into dollars in Hong Kong market. Arbitrage income:

11.3250/7.8261*10.6665-1= USD 0.02863.

No matter which currency is used for arbitrage, the income of unit currency is the same (of course, the currency name is different)