A. Space Arbitrage

New York

London

.67 pounds/$

.60 pounds/$

Assuming you can both buy and sell at these

rates, determine some way that you can make

money from this situation. (Work with $1000.)

First, make the two rates comparable. To do so,

I’ll convert the London rate to $/pound.

(Alternatively, I could have converted the NY

rate to pounds/$.)