Companies use interest arbitrage to find better interest rates abroad than those that are available in their home countries.

Question

Quizplus · Accepted Answer

Interest arbitrage involves exploiting the differences in interest rates between two or more countries to earn profits. Companies can take advantage of higher interest rates abroad by investing their capital in a foreign country and borrowing money at lower rates in their home country. This allows them to earn a higher return on their investments and increase their profits. Therefore, the statement is true.

Companies Use Interest Arbitrage to Find Better Interest Rates Abroad