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Your company has $1,000,000 in U.S. dollars that can be used to try to make arbitrage profits. You observe that the exchange rates for Swiss
Your company has $1,000,000 in U.S. dollars that can be used to try to make arbitrage profits. You observe that the exchange rates for Swiss francs are different at the two main banks used by your company, as follows:
| Red Bank | Blue Bank |
Bid | $1.085 | $1.089 |
Ask | $1.082 | $1.086 |
What profits, if any, can your firm make using these funds for arbitrage, if you move quickly before exchange rates adjust?
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