Vienna Corporate Treasury. 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 USD0.76021 = EUR1.00 USD0.76058 = EUR1.00 Barclays London USD0.75459 = EUR1.00 USD0.75472=EUR1.00 Using $5.5 million or its euro equivalent, determine if and how the corporate treasury could make geographic arbitrage profit with the two different exchange rate quotes. Calculate the first arbitrage opportunity below (Round to the nearest cent)
Vienna Corporate Treasury. 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 USD0.76021 = EUR1.00 USD0.76058 = EUR1.00 Barclays London USD0.75459 = EUR1.00 USD0.75472=EUR1.00 Using $5.5 million or its euro equivalent, determine if and how the corporate treasury could make geographic arbitrage profit with the two different exchange rate quotes. Calculate the first arbitrage opportunity below (Round to the nearest cent)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Ee 409.
Transcribed Image Text:Vienna Corporate Treasury. 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
USD0.76021 = EUR1.00
USD0.76058 = EUR1.00
Barclays London
USD0.75459 = EUR1.00
USD0.75472= EUR1.00
Using $5.5 million or its euro equivalent, determine if and how the corporate treasury could make geographic
arbitrage profit with the two different exchange rate quotes.
Calculate the first arbitrage opportunity below: (Round to the nearest cent.)
Arbitrage Strategy #1
Initial investment
5,500,000.00
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