Business & Economics
Locational Arbitrage. Assume the following information:
Beal Bank Yardley Bank
Bid price of New Zealand dollar $.301 $.298
Ask price of New Zealand dollar $.604 $.300
Given this information, is locational arbitrage possible? If so, explain the steps involved in locational arbitrage, and compute the profit from this arbitrage if you had $1,000,000 to use. What market forces would occur to eliminate any further possibilities of locational arbitrage?