Assume the Bid Rate of a Singapore Dollar Is

question 80

Multiple Choice

Assume the bid rate of a Singapore dollar is $.40 while the ask rate is $.41 at Bank X. Assume the bid rate of a Singapore dollar is $.42 while the ask rate is $.425 at Bank Z. 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) $11,764.
• B) -$11,964.
• C) $36,585.
• D) $24,390.
• E) $18,219.

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