Question: Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of $28.10. At the same

Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of $28.10. At the same time, a NASDAQ posts a bid price for HPQ of $27.85 and an ask price of $27.95.
a. Is there an arbitrage opportunity in this case? If so, how would you exploit it?
b. Suppose the NASDAQ revises his quotes to a bid price of $27.95 and an ask price of $28.05. Is there an arbitrage opportunity now? If so, how would you exploit it?
c. What must be true of the highest bid price and the lowest ask price for no arbitrage opportunity to exist?

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