Question 2 (5 marks)

Part 1 (2 marks) You need to buy 500,000 EURO using VND to pay for an import transaction. Suppose you need to buy the currency from a bank. Do a research on the exchange rates quoted by different banks and select the bank that you will transact with. Provide an explanation to support your decision, in which you should provide a calculation of the amount of VND needed to pay for the exchange transaction if your trade with each bank and a comparison among different banks to select the best one to trade with. You should also provide a screenshot of the banks exchange rates for reference.

Part 2 (3 marks) Explain the reasons (preferably with some research evidence) why different banks offer different exchange rates. Does the variation create an arbitrage opportunity? Why and why not? (you can use either research evidence or an example with calculation to support your argument).