Suppose the spot ask exchange rate, Sa($|), is $1.21 = 1.00 and the spot bid exchange rate,
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Question:
Suppose the spot ask exchange rate, Sa($|£), is $1.21 = £1.00 and the spot bid exchange rate, Sb($|£), is $1.20 = £1.00. If you were to buy $10,000,000 worth of British pounds and then sell them five minutes later, how much of your $10,000,000 would be "eaten" by the bid-ask spread?
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