American Bank quotes a bid rate of $0.026 and an ask rate of $0.028 for the Indian rupee (INR) ; National Bank quotes a bid rate of $0.024 and an ask rate for $0.025. Locational arbitrage would involve:
A) buying rupees from American Bank at the bid rate and selling them to National 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 National Bank at the bid rate and selling them to American Bank at the ask rate.
E) Locational arbitrage is not possible in this case.
Correct Answer:
Verified
Q86: Interest rate parity (IRP) states that the
Q87: For points lying to the left of
Q88: Which of the following is not true
Q89: Which of the following is not mentioned
Q90: National Bank quotes the following for
Q92: The larger the degree by which the
Q93: If interest rate parity exists, then the
Q94: Which of the following is an example
Q95: If interest rate parity (IRP) does not
Q96: If interest rate parity (IRP) exists, then
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents