Assume the Bid Rate of an Australian Dollar Is £0

question 13

Multiple Choice

Assume the bid rate of an Australian dollar is £0.40 while the ask rate is £0.42 at Bank Q. Assume the bid rate of an Australian dollar is £0.415 while the ask rate is £0.419 at Bank V. Given this information, what would be your gain if you use £1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the £1,000,000 you started with?

• A) £10,003
• B) £12,063
• C) £14,441
• D) £0
• E) £18,219

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Definitions:

Physical Activity

Any bodily movement produced by skeletal muscles that requires energy expenditure.

Crepitation

the grating, crackling or popping sounds and sensations experienced under the skin and joints or a crackling sensation due to the presence of air in the subcutaneous tissue.

Bone Spur

A bony growth formed on normal bone, often due to aging or as a response to friction or pressure.

Fluid

A substance that has no fixed shape and yields easily to external pressure; can be a gas or a liquid.