Question
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
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
USD0.75510=EUR1.00 (BID) USD0.75450=EUR1.00 (BID)
USD0.75561=EUR1.00 (ASK) USD0.75475=EUR1.00 (ASK)
Using $5.5 million or its euro equivalent, compute arbitrage profit in USD.
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Corporate Financial Management
Authors: Julian Ralph Franks, Harry H. Scholefield
2nd Edition
0566020548, 978-0566020544
