Problem: Arbitrage Opportunity A corporate treasury with operations in New York simultaneously calls Citibank in mid-town (New York City) and...
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Problem: Arbitrage Opportunity<br/> <br/> <br/> <br/> <br/> <br/>A

corporate treasury with operations in New York simultaneously calls Citibank in mid-town (New York City) and Barclays in London. The two banks give the following quotes at the same time on the euro.
 
 
 
 
 
 
 
 
Assumptions
 
Values
 
Beginning funds
 
 $        6,000,000.00
 
Citibank NY quotes:
 
 
 
    Bid ($/euro) buy
 
                              1.1640
 
    Ask ($/euro) sell 
 
                              1.1660
 
Barclays London quotes:
 
 
 
    Bid ($/euro)
 
                              1.1630
 
    Ask ($/euro)
 
                              1.1650

Subject: Business, Finance

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