I wondered if it would be beneficial to exchange a currency through one or more "in-between" currencies.
For example: instead of trading Russian Ruble (RUB) to Euro's (EUR), one would trade from RUB to US Dollars (USD) and then to EUR.
Neglecting exchange costs, I expected that there would be some difference in the resulting amount of money.
- I first imported an xml of all the RUB exchange rates (column C in the Excel).
- Then I imported an xml of all the EUR exchange rates (column G in the Excel).
- By inverting the latter I found how much EUR every currency was worth (column H in the Excel).
- Then I multiplied the column C with column H to find the resulting value.
What I found is that the resulting amount of money stayed the same, regardless of which currency I went through.
How can this be? Is my method of calculating the resulting amount of money perhaps incorrect?