Based on the following information, is there an arbitrage opportunity? If yes, what is the profit in terms of a percentage?

For the euro,

Bank A: $1.2-1.23

Bank B: $1.25-1.28

Select one:

a.

Yes, 1.6%.

b.

Yes, 6.67%.

c.

Yes, 4.69%

d.

Yes, 1.63%.

e.

No.

Can you please provide the explanation, formula and correct answer for the problem above?

I need specific step by step on how to solve the problem. The answer is D) "Yes, 1.63" Can you please explain how/why?