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1. LOCATIONAL ARBITRAGE: The following quotes for the Brazilian Real (US $ per Br. Real) are available in two different banks: Bank X Bank Y

1. LOCATIONAL ARBITRAGE:

The following quotes for the Brazilian Real (US $ per Br. Real) are available in two different banks:

Bank X Bank Y

Bid $0.3120/Br. Real $0.3452/Br. Real

Ask $0.3230/Br. Real $0.3610/Br. Real

You have 1 million dollars. Outline the strategy and the profit from location arbitrage.

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