Explain what market forces would occur to eliminate any


Assume the following information:    lion Bank     Giraffe Bank

Bid price of Canadian dollar          $.201          $.198

Ask price of Canadian dollar          $.204          $.200

a. Assume you have $1,000,000, explain the steps involved in creating an arbitrage profit (be specific) and calculate the profits from this arbitrage opportunity.

b. Explain what market forces would occur to eliminate any further possibilities of arbitrage?

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Financial Management: Explain what market forces would occur to eliminate any
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