10. In which case will locational arbitrage most likely be feasible?

a.	One bank's ask price for a currency is greater than another bank's bid price for the currency.
b.	One bank's bid price for a currency in one location is greater than another bank's ask price for the currency in another location.
c.	One bank's bid price for a currency in one location is greater than another bank's ask price for the currency in the same location.
d.	One bank's bid price for a currency is less than another bank's bid price for the currency. e. No answer

11. Assume the bid rate of a New Zealand dollar is $.33 while the ask rate is $.335 at Bank X. Assume the bid rate of the New Zealand dollar is $.32 while the ask rate is $.325 at Bank Y. Given this information, what would be your gain if you use $1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the $1,000,000 you started with?

a.	$15,385.
b.	$15,625.
c.	$22,136.
d.	$31,250.
e.	No Answer

12. Assume the following information:

You have $1,000,000 or 1,300,000 to invest:

Current spot rate of pound	=	$1.30
90-day forward rate of pound	=	$1.28
3-month deposit rate in U.S.	=	3%
3-month deposit rate in Great Britain	=	4%

If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S dollars or pounds you will have after 90 days?

a.	$1,024,000.
b.	$1,030,000.
c.	$1,040,000.
d.	$1,034,000.
e.	No Answer