Foreign exchange arbitrage refers to:
A) the simultaneous purchase and sale of a foreign currency asset in different markets to take advantage of a price differential.
B) actions taken to lower currency trading risks and make the markets safer.
C) the forgiving of penalties and other punishments for illegal foreign exchange activities.
D) government purchases or sales of a nation's own currency in international markets to change or stabilize the value of the currency.

Question

Quizplus · Accepted Answer

Foreign exchange arbitrage involves buying and selling a foreign currency simultaneously in different markets to profit from the difference in prices. This practice helps equalize prices in different markets and takes advantage of market inefficiencies.

Foreign Exchange Arbitrage Refers To