​Assume the Bid Rate of a Swiss Franc Is

question 40

Multiple Choice

​Assume the bid rate of a Swiss franc is $.57 while the ask rate is $.579 at Bank X. Assume the bid rate of the Swiss franc is $.560 while the ask rate is $.566 at Bank Y. 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) ​$7,067
• B) ​$8,556
• C) ​$10,114
• D) ​$12,238

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