Even if quoted exchange rates do not allow arbitrage, banks quoting the lowest offer prices in a currency will attract the bulk of customer purchases in that currency.
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Q1: Locational arbitrage ensures that bilateral exchange rates
Q2: Arbitrageurs make their profit by identifying situations
Q3: A bank is in a long euro
Q5: A currency cross rate does not involve
Q6: Suppose SSFr/€ = SFr1.50/€ and S¥/€ =
Q7: Pure or riskless arbitrage is defined as
Q9: The law of one price states that
Q10: Speculators make their profit from situations in
Q11: The following exchange rates are in equilibrium:
Q15: Prices in two currencies are related through
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