When it is possible to trade two separate currencies for a common third currency, economists refer to profit opportunities as:
A) backward arbitrage.
B) speculation.
C) triangular arbitrage.
D) forced equilibrium.

Question

Quizplus · Accepted Answer

Triangular arbitrage is a trading strategy that takes advantage of price differences between three currencies. By trading two separate currencies for a common third currency, profit opportunities can arise. This is done by taking advantage of discrepancies in exchange rates between the different currency pairs.

When It Is Possible to Trade Two Separate Currencies for a Common