Multiple Choice
If CIBC posts 1.10 CA$/US$ - 1.14 CA$/US$ bid-ask exchange rates,Scotiabank posts 1.12 CA$/US$ - 1.15 CA$/US$ bid-ask exchange rates,and RBC posts 1.13 CA$/US$-1.16 CA$/US$ bid-ask exchange rates,which of the following statements is correct:
A) You can make an arbitrage by exchanging CA$ for US$ at CIBC and then exchanging US$ for CA$ at RBC
B) You can make an arbitrage by exchanging US$ for CA$ at CIBC and then exchanging CA$ for US$ at RBC
C) You can make an arbitrage but none of these strategies allows you to make the arbitrage
D) Arbitrage is not possible
Correct Answer:
Verified
Correct Answer:
Verified
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