1) A company is working out of Vienna with operations in New York simultaneously calls Citibank in New York City and Barclays in London

1.Buy 1 Euro at 1.2825$ from Barclays London
Sell 1 Euro at 1.2828$ to Citibank NYC

Thus there is geographic arbitrage profit

Using 2 million dollars buy euros =2*10^6/1.2825=1559454.191 euros from Barclays
Sell euros and get =2*10^6/1.2825*1.2828 dollars =2000467.836 dollars from Citibank NYC

Arbitrage Profit=2000467.836-2000000=467.836 dollars

2.

Solution:

Quantity of imports = 400

Foreign currency Price = 20

Value of import in foreign currency = Quantity * Price = 400 *20 = 8000

Exchange rate = 1.50

Domestic currency price = Foreign currency price * Exchange rate = 20 *1.5 = 30

Value of import in foreign currency = Quantity * Price = 400 *30 = 12,000

Now when exchange rate falls to 1.20 then the quantity demanded will change

Change in price = Final price - Initial price = 1.2 *20 -1.5 *20 = -60

P = 1.5 *20 = 30

please see the attached file.for complete solution.