Question #61267

if bank X is quoting “A$1.5838/€ bid and A$1.1682/€ ask” and bank Y is quoting “A$1.1684/€ and A$1.1690/€ ask”. If you buy € 2 Million from X simultaneously sell € 2 Million to Y. Calculate arbitrage profit

Expert's answer

If bank X is quoting “A$1.5838/€ bid and A$1.1682/€ ask” and bank Y is quoting “A$1.1684/€ and A$1.1690/€ ask”, then if you buy € 2 Million from X and simultaneously sell € 2 Million to Y, then the arbitrage profit will be:

TP = 2,000,000*(1.1684 - 1.1682) = $400

TP = 2,000,000*(1.1684 - 1.1682) = $400

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