Solved: How corporte treasury could make geographic arbitrage profit, Finance Basics

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How corporte treasury could make geographic arbitrage profit

Problem:

Transatlantic Arbitrage. A corporate treasury working out of Vienna with operations in New York simultaneously calls Citibank in New York City and Barclays in London. The banks give the following quotes on the euro simultaneously

Citibank NYC Barclays London

$0.755-61/€ $0.7545-75/€

Using $1 million or its euro equivalent, show how the corporate treasury could make geographic arbitrage profit with the two different exchange rate quotes.

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