If the euro/$ U.S.exchange rate is 1.1€/$ in New York but 1.05€/$ in London, we should see:
A)People selling $ and buying euros in New York and then selling those euros and buying $ in London
B)People selling euros and buying $ in New York and then buying euros by selling $ in London
C)The price differential between the markets increase as people seek to take advantage of the situation
D)The $ should appreciate in New York relative to the euro

Question

Quizplus · Accepted Answer

People will sell dollars to buy euros in New York where euros are cheaper, then sell those euros to buy dollars in London where dollars are cheaper, profiting from the exchange rate difference.

If the Euro/$ U