Assume Locational Arbitrage Is Possible and Involves Two Different Banks

question 56

True/False

Assume locational arbitrage is possible and involves two different banks. The realignment that would occur due to market forces would increase one bank's ask rate and would decrease the other bank's bid rate.

---

Definitions:

Positively Skewed

A distribution characterized by a long tail to the right side, indicating that a majority of the data points are concentrated to the left of the mean.

Skewed

Describes a distribution that is asymmetrical, where data points cluster more on one side than the other, often leading to a longer tail on one side of the peak.

Mean

To find the average value of a group of numbers, one adds together all the numbers and divides by how many numbers there are.

Skewed

Describes a distribution of data that is asymmetrical, where a tail of the distribution is longer or fatter on one side than on the other.