Here are bid and ask prices from three banks.

                                    Bid                               Ask

HSBC                            $1.2805/euro               $1.2815/euro               

JP Morgan                    $1.2818/euro               $1.2822/euro

Soc Gen                        $1.2810/euro               $1.2820/euro

 

Explain how you can earn an arbitrage profit.  Begin by purchasing 1 million euro from one of the banks.

Answer rating: 100% (QA)

To potentially earn an arbitrage profit we can exploit price differences among the banks by purchasi... View the full answer