Question
5 Assume the following information: Webster Bank Citizens Bank Bid price of New Zealand dollar $.401 $.398 Ask price of New Zealand dollar $.404 $.400
| 5 Assume the following information: |
|
|
|
| Webster Bank | Citizens Bank |
| Bid price of New Zealand dollar | $.401 | $.398 |
| Ask price of New Zealand dollar | $.404 | $.400 |
Given this information, is locational arbitrage possible? If so, explain the steps involved in locational arbitrage, and compute the profit from this arbitrage if you had $1,000,000 to use. 10 points
What market forces would occur to eliminate any further possibilities of locational arbitrage? 5 points
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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
