1. Use the following information to answer the next two questions.

   Suppose you see the following quotes for pounds at three banks.

   Bank X:$1.255-65

   Bank Y:$1.245-59

   Bank Z:$1.258-61

   Find the locational arbitrage profit available to someone with access to $1,000,000

   		9638.55
   		0
   		1593.63
   		3182.18

6.25 points

QUESTION 4

1. The ask quote at Bank Y must increase to prevent the arbitrage opportunity found in the previous question.

   True

   False