Assume the Bid Rate of an Australian Dollar Is

question 4

Multiple Choice

Assume the bid rate of an Australian dollar is $.60 while the ask rate is $.61 at Bank Q. Assume the bid rate of an Australian dollar is $.62 while the ask rate is $.625 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) ​$16,393
• E) ​$18,219

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