Q 6When using ____, funds are not tied up for any length of time. A) B) arbitrage C) arbitrage D)

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Triangular arbitrage

Locational arbitrage

covered interest arbitrage

B and C

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16)Assume the following information:You have $1,000,000 to invest:

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

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$1,034,000.

$1,040,000.

$1,030,000.

$1,024,000.

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Assume the British pound is worth $1.60, and the Canadian dollar is worth $.80. What is the value of the Canadian dollar in pounds?

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.50.

2.0.

2.40.

.80.

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Hewitt Bank quotes a value for the Japanese yen () of $0.007, and a value for the Canadian Dollar (C$) of $0.821. The cross exchange rate quoted by the bank for the Canadian dollar is 118.00. You have $5,000 to conduct triangular arbitrage. How much will you end up with if you conduct triangular arbitrage?

Select one:

Triangular arbitrage is not possible in this case.

$5,030.45

$6,090.13

$6,053.27

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91)Assume you discovered an opportunity for locational arbitrage involving two banks and have taken advantage of it. Because of your and other arbitrageurs' actions, the following adjustments must take place.

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A and C

One bank's ask price will fall and the other bank's bid price will rise.

One bank's bid/ask spread will widen and the other bank's bid/ask spread will fall.

One bank's ask price will rise and the other bank's bid price will fall