1) At Bank X, the bid rate of a NZD is USD 0.630 and the ask rate is USD 0.635. However, at Bank Y, the bid rate of the NZD is USD 0.628 and the ask rate is USD 0.631. What would be your profit if you use USD 1,000,000 and try to execute locational arbitrage?

A) + USD 11,146.50 B) + USD 1,587.30 C) - USD 1,584.79 D) - USD 11,023.62

2) At Bank X, the bid rate of a NZD is USD 0.632 and the ask rate is USD 0.635. However, at Bank Y, the bid rate of the NZD is USD 0.628 and the ask rate is USD 0.631. What would be your profit if you use USD 1,000,000 and try to execute locational arbitrage?

A) + USD 1,584.79 B) - USD 1,584.79 C) + USD 11,146.50 D) - USD 11,146.50

3) In Tokyo the USD bid rate is JPY 110.55 and the USD ask rate is JPY 111.09, while in London the USD bid rate JPY 111.05 and the USD ask rate is JPY 111.60. What would be your profit if you use USD 1,000,000 and try to execute locational arbitrage?

A) -360.07 B) -336.96 C) -450.12 D) -512.39

4) In question (6), the data implies no profitable opportunity for locational arbitrage. But if the USD ask rate were _______, location arbitrage between Tokyo and London would become profitable, all else equal.

A) equal to JPY 111.05 B) less than JPY 111.05 C) greater than JPY 111.05 D) none of the above