Compute the profit from the arbitrage

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Reference no: EM131325285

Based on the information in the previous question, what market forces would occur to eliminate any further possibilities of the locational arbitrage described in your answer to Question.

Question:-
Assume the following information:

	Bank X	Bank Y
Bid price of Swiss francs	$.401	$.398
Ask price of Swiss francs	$.404	$.400

Given this information, is arbitrage possible?

If so, explain the steps that would create the arbitrage. Compute the profit from this arbitrage if you had $1,000,000 to use.

Reference no: EM131325285

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