Question
Bank X: Bid = NZ$2.5/SK and Offer = NZ$2.9/SK. Bank Y: Bid = NZ$2.2/SK and Offer = NZ$2.6/SK. If you are a Swedish arbitrager (have
Bank X: Bid = NZ$2.5/SK and Offer = NZ$2.9/SK. Bank Y: Bid = NZ$2.2/SK and Offer = NZ$2.6/SK. If you are a Swedish arbitrager (have SK), how can you do the arbitrage? Question options: A) Buy SK at NZ$2.6/SK and Sell SK at NZ$2.5/SK B) Will not do the arbitrage C) Buy SK at NZ$2.2/SK and Sell SK at NZ$2.5/SK D) Buy NZ$ at NZ$2.5/SK and Sell NZ$ at NZ$2.9/SK E) Buy NZ$ at NZ$2.5/SK and Sell NZ$ at NZ$2.6/SK Bank X: Bid = Won20/Yen and Offer = Won28/Yen. Bank Y: Bid = Won32/Yen and Offer = Won34/Yen. If you are a Japanese arbitrager (have Yen), how can you do the arbitrage? Question options: A) Buy Won at Won34/Yen and sell Won at Won20/Yen B) Buy Yen at Won32/Yen and Sell Yen at Won34/Yen C) Buy Won at Won32/Yen and sell Won at Won28/Yen D) Buy Yen at Won32/Yen and Sell Yen at Won20/Yen E) Will not do the arbitrage Bank X: Bid = $2/Euro and Offer = $2.4/Euro. Bank Y: Bid = $2.7/Euro and Offer = $2.9/Euro. If you are a French arbitrager (have Euro), how can you do the arbitrage? Question options: A) Will not do the arbitrage B) Buy $ at $2.4/Euro and Sell $ at $2.7/Euro C) Buy Euro at $2.4/Euro and Sell $ at $2/Euro D) Buy $ at $2.7/Euro and Sell $ at $2.4/Euro E) Buy Euro at $2.9/Euro and Sell $ at $274/Euro
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