Assume the Following Bid and Ask Rates of the Pound

question 29

Multiple Choice

Assume the following bid and ask rates of the pound for two banks as shown below: As locational arbitrage occurs:

• A) the bid rate for pounds at Bank C will increase; the ask rate for pounds at Bank D will increase.
• B) the bid rate for pounds at Bank C will increase; the ask rate for pounds at Bank D will decrease.
• C) the bid rate for pounds at Bank C will decrease; the ask rate for pounds at Bank D will decrease.
• D) the bid rate for pounds at Bank C will decrease; the ask rate for pounds at Bank D will increase.

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Definitions:

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment, and financing activities.

Balance Sheets

Financial statements that summarize a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Fraudulent and Unfair Behavior

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Sales Practice Abuses

Unethical or illegal business practices related to the selling of securities, often involving misleading information or high-pressure sales tactics.