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Assume the following bid and ask rates of the pound for two banks as shown below: Bank C Bank D Bid $1.61 $1.58 Ask $1.63
Assume the following bid and ask rates of the pound for two banks as shown below: Bank C Bank D Bid $1.61 $1.58 Ask $1.63 $1.60 As locational arbitrage occurs the bid rate for pounds at Bank C will decrease the ask rate for pounds at Bank D will decrease the bid rate for pounds at Bank C will decrease, the ask rate for pounds at Bank D vill increase the bid rate for pounds at Bank C will increase the ask rate for pounds at Bank D will increase the bid rate for pounds at Bank C will increase the ask rate for pounds at Bank D will decrease
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