For Locational Arbitrage to Be Possible, One Bank's Ask Rate

question 80

True/False

For locational arbitrage to be possible, one bank's ask rate must be higher than another bank's bid rate for a currency.

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Definitions:

Transit

The act of moving people or goods from one location to another, typically referring to public transportation systems.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.

Fine Imposed

A monetary penalty levied by an authority as punishment for a violation or infringement.

Demand Curve

Illustrates the willingness of consumers to buy a particular quantity of a good at various price levels, with a downward slope indicating that as price decreases, demand increases.