Assume the Bid Rate of an Australian Dollar Is

question 70

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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