Question
xiii) Explain the concept of locational arbitrage and the scenario necessary for it to be plausible. (2 marks) Bank A Bank B Bid price of
xiii) Explain the concept of locational arbitrage and the scenario necessary for it to be plausible. (2 marks)
|
| Bank A | Bank B |
| Bid price of Ghana Cedi | $0.2222 | $0.2251 |
| Ask Price of Ghana Cedi | $0.2247 | $0.2255 |
Given the above 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 million to use. (3 marks)
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Public Finance In Theory And Practice
Authors: Holley Ulbrich
2nd Edition
041558597X, 978-0415585972
