I am struggling with a formula for calculating the above. I have been using the following example: https://www.youtube.com/watch?v=lKu2LAgEcpU
A = YEN82 / USD B = USD1.6 / GBP C = GBP128 / YEN
The implied JPY/GBP XRate is 131.2 (82 X 1.6).
As the difference between the implied JPY/USD XRate and the quoted XRate is a constant should my result not always be either positive or negative the same value? In my calculations I am getting a 2.5% margin when I calculate one way and a -2.44% margin when I calculate the other way. I would have expected the result to be either 2.5% or -2.5%
i.e. Starting with JPY100,000,000
Option A = 2.5% gain ==================== JPY to GBP = 781,250 USD to GBP = 1,250,000 JPY to USD = 102,500,000 Option B = 2.44% loss ===================== JPY to USD = 1,219,512.20 USD to GBP = 762,195.12 JPY to GBP = 97,560,975.61