If CIBC Posts 1

question 13

Multiple Choice

If CIBC posts 1.10 CA$/US$ - 1.14 CA$/US$ bid-ask exchange rates,Scotiabank posts 1.12 CA$/US$ - 1.15 CA$/US$ bid-ask exchange rates,and RBC posts 1.13 CA$/US$-1.16 CA$/US$ bid-ask exchange rates,which of the following statements is correct:

• A) You can make an arbitrage by exchanging CA$ for US$ at CIBC and then exchanging US$ for CA$ at RBC
• B) You can make an arbitrage by exchanging US$ for CA$ at CIBC and then exchanging CA$ for US$ at RBC
• C) You can make an arbitrage but none of these strategies allows you to make the arbitrage
• D) Arbitrage is not possible

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Definitions:

Printer/Copier/Fax Machine

Office equipment that combines the functionalities of printing, copying, and faxing into a single device.

Dollar Markup

The difference between the cost of a good or service and its selling price, expressed in dollar terms.

Ratchet-Style

A mechanism or approach that permits only incremental increases or improvements, often without the possibility of reversal.

Pruning Clippers

Gardening tools used for cutting and shaping plants by removing unnecessary or unwanted parts.