Chartered Financial Analyst Level 2
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34 The following are spot rate quotes in the interbank market between the Danish Krone (DKK), EUR, and USD:
- DKK/EUR: 7.4524/7.4679
- DKK/USD: 7.0820/7.0870
Note: DKK/EUR is the amount of DKK per 1 EUR. DKK/USD is the amount of DKK per 1 USD.
If a dealer quoted a bid-offer of 0.9483/0.9510 for EUR/USD, a trader would most likely:
34 The following are spot rate quotes in the interbank market between the Danish Krone (DKK), EUR, and USD:
- DKK/EUR: 7.4524/7.4679
- DKK/USD: 7.0820/7.0870
Note: DKK/EUR is the amount of DKK per 1 EUR. DKK/USD is the amount of DKK per 1 USD.
If a dealer quoted a bid-offer of 0.9483/0.9510 for EUR/USD, a trader would most likely:
Exam-Like
A
not make any arbitrage profits.
B
make arbitrage profits by buying USD from the dealer with EUR and selling it in the interbank market.
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