A. Locational Arbitrage. Assume the following information: Beal Bank Yardley Bank Bid price of New...
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A. Locational Arbitrage. Assume the following information: Beal Bank Yardley Bank Bid price of New Zealand dollar S.734 $.731 Ask price of New Zealand dollar S.736 $.732 Given this information, is locational arbitrage possible? If so, explain the steps involved in locational arbitrage, and compute the profit from this arbitrage if you had $100,000 to use. What market forces would occur to eliminate any further possibilities of locational arbitrage B. Triangular Arbitrage. Assume the following information: 1 Quoted Price Value of Canadian dollar in U.S. dollars S.83 Value of New Zealand dollar in U.S. dollars S.72 Value of Canadian dollar in New Zealand dollars NZ$1.165 Given this information, is triangular arbitrage possible? If so, explain the steps that would reflect triangular arbitrage, and compute the profit from this strategy if you had $100,000 to use. What market forces would occur to eliminate any further possibilities of triangular arbitrage
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