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Currency Arbitrage

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You are an investor looking for arbitrage opportunities in foreign currency markets. You encounter the following situation between two currency exchange houses in New Zealand:

BANK #1 BANK #2
Bid Ask Bid Ask
NZ$ $0.635 $0.64 $0.645 $0.65

You are interested in maximizing your currency position in order to take advantage of any discrepancy.

What would you do to take advantage of this discrepancy assuming that you have $10,000 to exchange?

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This solution is comprised of a detailed explanation to answer what would you do to take advantage of this discrepancy assuming that you have $10,000 to exchange.

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currency arb
You are an investor looking for arbitrage opportunities in foreign currency markets. You encounter the following situation between two currency exchange houses in New ...

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