Bank A quotes a bid rate of $0.300 and an ask rate of $0.305 for the Malaysian ringgit (MYR). Bank B quotes a bid rate of $0.306 and an ask rate of $0.310 for the ringgit. What will be the profit for an investor that has $500,000 available to conduct locational arbitrage?
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Bank A quotes a bid rate of $0.300 and an ask rate of $0.305 for the Malaysian ringgit (MYR). Bank B quotes a bid rate of $0.306 and an ask rate of $0.310 for the ringgit. What will be the profit for an investor that has $500,000 available to conduct locational arbitrage?
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- Assume the bid rate of a Norwegian krone is $0.1042 while the ask rate is $.1094 at Bank A. Assume the bid rate of the Norwegian krone is $.0999 while the ask rate is $.1039 at Bank B. Given this information, what would be your gain if you use $2,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the $2,000,000 you started with? $6,352 $5,775 $5,197 $6,064 $5,486Assume the bid rate of an Yen dollar is $ 1.8 while the ask rate is $ 3.5 at Arab Bank.Assume the bid rate of an Yen dollar is $3.4 while the ask rate is $5.7 at Palestine Bank. Given this information, what would be your gain if you use $8876.7 and execute locational arbitrage? =8876.713.5^ * 3.4b =8876.7/5.7^ * 3.5c =8876.7/3.4^ * 1.8d = 8876.7 /3.5^ * 5.7Read the following information: American Bank quotes a bid rate of $0.026 and an ask rate of $0.028 for the Indian rupee (INR); Indian national bank quotes a bid rate of $0.024 and an ask rate for $0.025. Locational arbitrage would involve _______. A. buying rupees from National Bank at the bid rate and selling them to American Bank at the ask rate B. buying rupees from National Bank at the ask rate and selling them to American Bank at the bid rate C. buying rupees from American Bank at the ask rate and selling to National Bank at the bid rate D. buying rupees from American Bank at the bid rate and selling them to National Bank at the ask rate
- Assume the bid rate of a Canada dollar is A$.271 while the ask rate is A$.273 at Bank A. Assume the bid rate of the Canada dollar is A$.265 while the ask rate is A$.266 at Bank B. Given this information, what would be your gain if you use A$2,500,000 and execute locational arbitrage? That is, how much will you end up with over and above the A$2,500,000 you started with? Group of answer choices A$ 46,992 A$ 65,789 - A$ 65,789 A$ 18,315 - A$ 46,992. GT Bank Ghana Limited quotes JPY/EUR 155-165, and GCB Bank quotes EUR/JPY0.0059-0.0063a. Are these quotes identical? b. If not, is there an opportunity for arbitrage? c. If there is an opportunity for arbitrage, how would one profit from it? 3. Given the bid-ask quotes for jpy/gbp 220-240, at what rate will:(a) Mr. Agbo purchase gbp? (b) Mr. Agbo sell gbp? (c) Mr. Debrah purchase jpy?(d) Mr. Kwaku sell jpy?A New York Bank quotes for the bid rate for pound at $1.4360 and the ask rate at $1.4370 and a London Bank quotes for the bid rate for the pound at $1.4202 and the ask rate is $ 1.4325. An arbitrager has working capital of $1,000,000. How much would the arbitrager have if the arbitrager carried out a locational arbitrage?
- a) You observe the following quotes for the USD/AUD in the spot market from two banks: Bank of Sydney Bank of New York Bid Ask Bid Ask 0.71711 0.71715 0.71708 0.71715 Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculate the potential profit if you are able to use AUD 25,000. If not, explain why arbitrage is not possible? (b) You observe the following quotes for the GBP /AUD in the spot market from two banks: Bank of Melbourne Bank of London Bid Ask Bid Ask 0.5458 0.5459 0.5514 0.5515 Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculate the potential profit if you are able to use GBP 50,000. If not, explain why arbitrage is not possible? c) You observe the following quotes for the EUR / USD in the spot market from two banks: Deutsche Bank Bank of America Bid Ask Bid Ask 1.18102 1.18102 1.18094 1.18100 Do these quotes imply the…Peter Sheffield has Euros (€) amounting to €500,000 and is provided with the following quotes: Bank A: Euro/US dollar = €0.8418/$ Bank A: British pound /US dollar = £0.7538/S Bank B: British pound/Euro = £0.8863/€ Determine whether an arbitrage opportunity exists. Show your calculation in the space below and briefly explain (in one or two sentences) why the arbitrage opportunity exists or not. For example, show your calculation as follows (The currencies used in the example are not applicable to your calculation. It just provide you with information how you should show your calculation): Yen/ZAR = 11.7654/1.3954 = 8.4316 (Round your answer to 4 decimals) Reason why arbitrage opportunity exists/ does not exist:You are the trade advisor to a multinational company with an investment of US1,500,000. The following are the rates quoted on the FOREX market. US $ to Euro 1.22/€ US$ to pounds 1.84/£ Euros to pounds 1.54/£ Calculate the cross rate and determine if a profit opportunity exists. What is the value of that profit if you decide to trade with the US$1.5 million?
- You observe the following quotes for the USD/AUD in the spot market from two banks:Bank of Sydney /Bank of New YorkBid Ask/ Bid Ask0.71711 0.71715 /0.71708 0.71715Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculatethe potential profit if you are able to use AUD 25,000. If not, explain why arbitrage is not possible?(b) You observe the following quotes for the GBP /AUD in the spot market from two banks:Bank of Melbourne/ Bank of LondonBid Ask/ Bid Ask0.5458 0.5459 /0.5514 0.5515Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculatethe potential profit if you are able to use GBP 50,000. If not, explain why arbitrage is not possible?c) You observe the following quotes for the EUR / USD in the spot market from two banks:Deutsche Bank/ Bank of AmericaBid Ask /Bid Ask1.18102 1.18102 /1.18094 1.18100Do these quotes imply the possibility of earning a profit by using locational arbitrage? If…Assume the following information: Bid price of Singapore dollar Ask price of Singapore dollar Marcus Bank $0.748 $0.750 $4,000.00. $5,347.59. $2,000.00. $2,666.67. Truist Bank $0.752 $0.753 Given this information, is locational arbitrage possible? If so,compute the profit from this arbitrage if you had $1,000,000 to use.Ali is specialized in Cross-rate arbitrage. He notices the below quotes: CHF1.5971 = 1USD; AUD1.8215 = 1USD; AUD1.1440 = 1CHF. By ignoring transaction cost. Does Ali have an arbitrage opportunity on these quotes?In case of any arbitrage opportunity, what steps has to be taken to achieved, if he has USD1,000,000 available for this purpose.