Bob's Money to spend: 1,000,000 $USD

Bank C: Euro/US dollar = 0.8529/$

Bank C: British pound /US dollar = 0.7501/$

Bank D: British pound/Euro = 0.8864/

Bob did his own direct cross rate calculation of the British pound/Euro and according to him the British pound/Euro = 0.8864/ quotation from Bank D, provides him with an arbitrage opportunity, since the direct cross rate, based on the quotations of Bank C is 0.8795/. How can Smith make a profit from this opportunity?

a. He can sell $ for 0.8529 with Bank A, then sell for 0.8864 with Bank B, then buy $ for 0.7501 with Bank A.

b. He can sell $ for 0.7501 with Bank A, then buy for 0.8864 with Bank B, then buy $ for 0.8529 with Bank A.

c. He can buy for $0.8529 with Bank A, then buy for 0.8864 with Bank B, then sell for $0.7501 with Bank A.

d. He can buy for $0.7501 with Bank A, then sell for 0.8864 with Bank B, then sell for $0.8529 with Bank A